20250109Staff Comments.pdf

RECEIVED
Thursday, January 9, 2025 11:40:06 AM
IDAHO PUBLIC
UTILITIES COMMISSION
CHRIS BURDIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9810
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR AN ) CASE NO. IPC-E-24-41
ORDER APPROVING THE TRANSFER OF )
CERTAIN ASSETS ASSOCIATED WITH )
TRANSMISSION PLANT HELD FOR ) COMMENTS OF THE
FUTURE USE ) COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Chris Burdin, Deputy Attorney General,
submits the following comments.
BACKGROUND
On November 5, 2024, Idaho Power Company("Company") filed an application
("Application") with the Commission requesting approval to convey approximately 1.07 acres of
land located in the McCall-Donnelly Transmission Corridor, in Valley County, Idaho, to Daniel
J. Booth.
The Company asserts that in 1985 it acquired various strips of land from Union Pacific
Railroad Company ("Union Pacific")totaling approximately 90 acres associated with an
abandoned railroad line in Valley County. The purpose of the land acquisition was to create a
future McCall-Donnelly Transmission Corridor. Since acquiring the land, the Company has sold
STAFF COMMENTS 1 JANUARY 9, 2025

various parcels to landowners while retaining easement rights on the property that would allow it
to build a transmission line in the future.
The Company represents that under the proposed transaction, the Company would
transfer the 1.07-acre parcel to Mr. Booth for a purchase price of$1,900,but the Company will
reserve the entire parcel of land as an easement. Application at 1. The Commission most
recently approved a transfer of similar nature in Commission Order No. 36089.
STAFF ANALYSIS
Staff reviewed the Company's Application, responses to Production Requests, and
additional supporting documents in conducting its analysis. Staff focused on compliance with
Idaho Code § 61-328, retention of easement rights, and accounting treatment of the proposed
transfer. After its review, Staff believes the Company's request is reasonable and that the sale is
in the interest of both the Company and its customers.
Idaho Code § 61-328
An electric utility must obtain approval from the Commission before it sells or transfers
ownership of any property located in Idaho and used in the generation, transmission, or
distribution of electricity in Idaho. Idaho Code § 61-328(1). The Company has previously
conveyed parcels of land from the original purchase of 150.03 acres from Union Pacific, leaving
the Company with a remaining 58.17 acres. See Company Response to Production Request No.
2.
Further,Idaho Code § 61-328(3) states that:
Before authorizing the transaction, the public utilities commission shall find: (a)
That the transaction is consistent with the public interest; (b) That the cost of and
rates for supplying service will not be increased by reason of such transaction; and
(c) That the applicant for such acquisition or transfer has the bona fide intent and
financial ability to operate and maintain said property in the public service.
In its Application, the Company asserts that the proposed land transfer meets the
requirements of Idaho Code § 61-328(3). Staff reviewed the Real Estate Purchase and Sale
Agreement ("Agreement") submitted with the Application, and Staff notes that the sale would
relieve the Company of ownership and maintenance responsibilities associated with the land,
STAFF COMMENTS 2 JANUARY 9, 2025

while retaining easement rights that would allow it to build a future transmission line on the land.
Staff believes the terms of the Agreement are consistent with the public interest.
Staff also supports the Company's assertion that the cost of and rates for supplying
service will not be increased by the proposed transaction. As stated above, transfer of the land
relieves the Company of financial obligations related to the ownership and maintenance of it.
Easement rights retained by the Company allow it to utilize the land at a future date without a
corresponding land purchase.
Lastly, Staff reviewed documentation to verify the Buyer's bona fide intent and financial
ability to operate and maintain the parcel in question. The Buyer owns the parcel adjacent to the
parcel that is the subject of this Application. See Application Attachment 1, Exhibit A.
Therefore, Staff believes the Buyer has a bona fide intent and financial ability to operate and
maintain the parcel in the public service.
Proposed Accounting
The Company provided its proposed accounting journal entries with its Application.
Staff reviewed the proposed accounting treatment and believes that all proposed entries are
proper and that the estimates are reasonable.
The historical price of the land is $1,148.33. Staff verified that this value was accurate
and was calculated based upon the original value of the land, $1,073.21 per acre multiplied
by the 1.07 acres being sold. The Company is proposing to sell the land for$1,900.00. The
Company states that the value of agricultural land in Valley County is generally $3,500 to $7,500
per acre. However,because the land is irregularly shaped and the Company must retain
easement rights for potential future use, the land's market value is greatly reduced. Response to
Production Request No. 9. Staff agrees that the land is irregularly shaped based upon Exhibit A-
1 provided in the Application. Staff also agrees that the retainment of easement rights reduces
the value of the land.
The Company determined the value of the easement to be half of the value of the
historical cost of the land, $574.17. Response to Production Request No. 10. Staff agrees that
the value of the easement is reasonable. The Company is anticipating incurring closing costs of
$30 and selling costs of$800. The Company based the closing cost upon the cost to record the
deed with the county, which is $15 for the first page and$3 for each additional page. Response
STAFF COMMENTS 3 JANUARY 9, 2025

to Production Request No 8. The Company states that the selling costs are based upon an hourly
rate of$80 for internal real estate labor costs multiplied by a projected 10 hours needed to
coordinate and facilitate the transaction.
Based upon the proposed journal entries, the Company estimates that the sale of land will
result in a gain on disposition of$495.84. Because the closing costs and selling costs are
estimates, this value could change. Staff does not believe that these estimates are materially
different than what the actuals will be. As a result, Staff believes that the Company will have a
gain on disposition as presented in Attachment 2 of the Company's Application.
Customer Comments
As required by Idaho Code 61-328(2), the Commission will hold a telephonic public
hearing on January 14, 2025. As of January 9, 2025, zero (0) public comments have been filed
for this case.
STAFF RECOMMENDATION
Staff recommends the Commission issue an Order approving the Company's proposed
transfer of land as detailed in its Application.
Respectfully submitted this 9th day of January 2025.
6"� -
LA. —
Chris Burdin
Deputy Attorney General
Technical Staff. Leena Gilman, Michael Ott
I:\Utility\UMISC\COMMENTS\IPC-E-24-41 Comments.docx
STAFF COMMENTS 4 JANUARY 9, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS DAY OF JANUARY 2025,
SERVED THE FOREGOING COMMENTS OF THE OMMISSION STAFF, IN CASE
NO. IPC-E-24-41, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
LISA D NORDSTROM MATT LARKIN
IDAHO POWER COMPANY COURTNEY WAITES
PO BOX 70 IDAHO POWER COMPANY
BOISE ID 83707-0070 PO BOX 70
E-MAIL: lnordstrom(Lidahopowencom BOISE ID 83707-0070
dockets Cajdahopower.com E-MAIL: mlarkin(widahopower.com
ewaites ividahopower.com
PATRICIA JORDA)f, SECRETARY
CERTIFICATE OF SERVICE