20250109Technical Hearing 1-9-2025.pdf

1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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3
IN THE MATTER OF ROCKY MOUNTAIN )
4 POWER' S APPLICATION FOR ) CASE NO. PAC-E-24-04
AUTHORITY TO INCREASE ITS RATES )
5 AND CHARGES IN IDAHO )
6 )
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8
9 BEFORE
10 COMMISSIONER EDWARD LODGE (Presiding)
COMMISSIONER ERIC ANDERSON
11 COMMISSIONER JOHN HAMMOND
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PLACE : Commission Hearing Room
15 11331 West Chinden Blvd.
Building 8, Suite 201-A
16 Boise, Idaho
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19 DATE : January 21, 2025
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21 VOLUME I - Pages 1 - 77
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CSB REPORTING 1 COLLOQUY
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1 A P P E A R A N C E S
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3 For the Staff: Adam Triplett
Deputy Attorney General
4 IPUC
11331 W. Chinden Blvd. ,
5 Bldg. No . 8, Suite 201-A
PO Box 83720
6 Boise, ID 83720-0074
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For Rocky Mountain Power: Joseph Dallas
8 PacifiCorp/Rocky Mountain
825 NE Multnomah
9 Suite 2000
Portland, OR 97232
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11 For Idaho Irrigation Eric L. Olsen
Pumpers Association: Echo Hawk & Olsen PLLC
12 505 Pershing Avenue
Suite 100
13 PO Box 6119
Pocatello, Idaho 83205
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15 For PacifiCorp Idaho Ronald Williams
Industrial Customers : Hawley Troxell Ennis
16 & Hawley LLP
PO Box 1617
17 Boise, Idaho 83701
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CSB REPORTING 2 APPEARANCES
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1 I N D E X
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3 WITNESS EXAMINATION BY PAGE
4 Joelle Steward Mr. Dallas (Direct) 8
(Rocky Mountain) Prefiled Direct Testimony 10
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6 Lance Kaufman Mr. Olsen (Direct) 40
(IIPA) Prefiled Direct Testimony 43
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8 Donn English Mr. Triplett (Direct) 52
(Staff) Prefiled Direct Testimony 55
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CSB REPORTING 3 INDEX
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1 E X H I B I T S
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3 NUMBER DESCRIPTION PAGE
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FOR PACIFICORP/DBA ROCKY MOUNTAIN POWER:
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61 . Tariff Sheets - 77 pages Prefiled
6 Admitted 76
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8 FOR THE STAFF:
9 101 . Professional Qualifications Prefiled
of Donn English Admitted 76
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FOR THE IDAHO IRRIGATION PUMPERS ASSOCIATION:
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201 . Professional Qualifications Prefiled
13 of Lance Kaufman Admitted 76
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CSB REPORTING 4 EXHIBITS
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I BOISE, IDAHO, THURSDAY, JANUARY 9, 2025, 10 : 00 A. M.
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4 COMMISSIONER LODGE : Good morning,
5 everyone . This is the time and place for a technical
6 hearing in Case No . PAC-E-24-04, further identified as in
7 the matter of Rocky Mountain Power' s application for
8 authority to increase its rates in the State of Idaho .
9 This hearing is taking place to consider
10 the general rate case filed with the Commission on
11 May 31st, 2024, seeking authority to increase Rocky
12 Mountain Power' s general rates for electrical service in
13 Idaho .
14 My name is Edward Lodge . I 'm the Chair of
15 today' s proceedings . I 'm joined by Commissioner Eric
16 Anderson and Commissioner John Hammond. We comprise the
17 Commission and we will collectively make a final decision
18 in these matters .
19 For today' s proceedings, we have Connie
20 Bucy serving as our court reporter, so I am reminded to
21 talk slowly, clearly, and into the microphone for the
22 benefit of the record.
23 By way of background, on October 21st and
24 at several subsequent meetings, the Company, all
25 intervenors, and Staff participated in settlement
CSB REPORTING 5 COLLOQUY
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1 negotiations which resulted in a proposed settlement .
2 On December 6, 2024, the Company filed a
3 stipulation settlement and a motion for approval of the
4 stipulation settlement . The proposed settlement was
5 signed by Staff, the Company, and all intervenors .
6 We ' ll begin this morning by taking the
7 appearance of the parties and let ' s begin with the
8 Applicant Rocky Mountain Power.
9 MR. DALLAS : Yes, good morning, Joe Dallas
10 for Rocky Mountain Power.
11 COMMISSIONER LODGE : And for the
12 Irrigation Pumpers Association.
13 MR. OLSEN: Eric Olsen for Idaho
14 Irrigation Pumpers Association.
15 COMMISSIONER LODGE : Thank you.
16 PacifiCorp Idaho Industrial Customers .
17 MR. WILLIAMS : Ron Williams on behalf of
18 the PacifiCorp Idaho Industrial Customers .
19 COMMISSIONER LODGE : Thank you. For
20 Bayer? And for Commission Staff.
21 MR. TRIPLETT : Deputy Attorney General
22 Adam Triplett on behalf of Commission Staff.
23 COMMISSIONER LODGE : Great, thank you very
24 much. Are there any parties that we 've missed for
25 purposes of identification for the record?
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I Hearing none, are there any preliminary
2 matters that need to come before the Commission?
3 MR. DALLAS : Yes, Chair.
4 COMMISSIONER LODGE : You bet .
5 MR. DALLAS : In preparation for today' s
6 hearing, we did notice an inadvertent error in Exhibit 61
7 that accompanies the testimony in support of the
8 stipulation by Joelle Steward. In particular, that
9 exhibit did not include Electric Service Schedule 74,
10 which is the renewable energy credit option program;
11 however, the schedule is already on the record as Exhibit
12 46 to the testimony of Craig Eller.
13 The Company proposes to include a complete
14 tariff index, which includes Electric Service Schedule 74
15 in a tariff compliance filing if the Commission approves
16 the settlement today.
17 COMMISSIONER LODGE : Thank you. Do we
18 need to have any -- okay, perfect . Thank you very much.
19 I appreciate that .
20 Any other preliminary matters? Thank you.
21 Before calling the first witness, do
22 parties intend to present direct and/or rebuttal
23 testimony to spread upon the record?
24 All right, thank you, and with that, we ' re
25 ready to start the first witness . Let ' s begin with Rocky
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1 Mountain Power.
2 MR. DALLAS : Yes, Rocky Mountain Power
3 calls Joelle Steward.
4 COMMISSIONER LODGE : Great, thank you. We
5 will have you come up here and Commissioner Hammond will
6 swear you in.
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8 JOELLE STEWARD,
9 produced as a witness at the instance of Rocky Mountain
10 Power, having been first duly sworn to tell the truth,
11 was examined and testified as follows :
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13 COMMISSIONER LODGE : Mr. Dallas .
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15 DIRECT EXAMINATION
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17 BY MR. DALLAS :
18 Q Good morning, Ms . Steward.
19 A Good morning.
20 Q Can you please state and spell your last
21 name for the record?
22 A My name is Joelle Steward. It ' s
23 J-o-e-1-1-e S-t-e-w-a-r-d.
24 Q And Ms . Steward, what is your position at
25 Rocky Mountain Power?
CSB REPORTING 8 STEWARD (Di)
208 . 890 . 5198 Rocky Mountain Power

1 A I 'm the senior vice president of
2 regulation.
3 Q And did you prepare and file testimony and
4 exhibits in support of the stipulation filed in the
5 record?
6 A I did.
7 Q And besides the correction that I
8 mentioned during the preliminary matters portion of the
9 hearing, are there any other corrections you'd like to
10 make to either your testimony or exhibits?
11 A No .
12 Q And if I asked you the questions that are
13 contained in your testimony that you prefiled today,
14 would your answers be the same?
15 A Yes .
16 MR. DALLAS : Thank you, and I move to
17 admit Ms . Steward' s testimony in support of the
18 stipulation that was filed on December 19th, 2024, into
19 the record and to have that testimony displayed within
20 the transcript .
21 COMMISSIONER LODGE : Great . Without
22 objection, we will spread the testimony across the record
23 as if read. Thank you.
24 (The following prefiled direct testimony
25 of Ms . Joelle Steward is spread upon the record. )
CSB REPORTING 9 STEWARD (Di)
208 . 890 . 5198 Rocky Mountain Power

1 I . INTRODUCTION AND QUALIFICATIONS
2 Q. Please state your name, business address, and
3 present position with PacifiCorp, d/b/a Rocky Mountain
4 Power ("Rocky Mountain Power" or the "Company") .
5 A. My name is Joelle R. Steward. My business
6 address is 1407 West North Temple, Salt Lake City, Utah
7 84116 . My present position is Senior Vice President,
8 Regulation.
9 Q. Please summarize your education and business
10 experience .
11 A. I have a Bachelor of Arts degree in Political
12 Science from the University of Oregon and an M.A. in
13 Public Affairs from the Hubert Humphrey Institute of
14 Public Policy at the University of Minnesota. Between
15 1999 and March 2007, I was employed as a Regulatory
16 Analyst with the Washington Utilities and Transportation
17 Commission. I joined the Company in March 2007 as a
18 Regulatory Manager, responsible for all regulatory
19 filings and proceedings in Oregon. On February 14, 2012,
20 I assumed responsibilities overseeing cost of service and
21 pricing for PacifiCorp. In May 2015, I assumed broader
22 oversight over regulatory affairs in addition to the cost
23 of service and pricing responsibilities . In 2017, I
24 assumed the role as Vice President, Regulation for Rocky
25 Mountain Power; in November 2021, I assumed my current
CSB REPORTING 10 Steward, STIP 1
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1 role as Senior Vice President, Regulation for Rocky
2 Mountain Power.
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CSB REPORTING 11 Steward, STIP 1a
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1 Q. Have you appeared as a witness in previous
2 regulatory proceedings?
3 A. Yes . I have testified on various matters in the
4 states of Idaho, Oregon, Utah, Washington, and Wyoming.
5 II . PURPOSE OF TESTIMONY
6 Q. What is the purpose of your testimony?
7 A. The purpose of my testimony is to present and
8 support the Stipulation reached in Case No . PAC-E-24-04
9 PacifiCorp' s General Rate Case, ("2024 GRC") , entered
10 into by Rocky Mountain Power ("Company") ; Staff for the
11 Idaho Public Utilities Commission ("Staff") ; the Idaho
12 Irrigation Pumpers Association, Inc. ("IIPA") ; P4
13 Production, L. L.0 an affiliate of Bayer Corporation
14 ("Bayer") ; and PacifiCorp Idaho Industrial Customers
15 ("PIIC") ; collectively referred to in my testimony as the
16 Parties .
17 My testimony provides background on the
18 Company' s 2024 GRC and explains the terms and conditions
19 of the Stipulation reached between the Parties . I present
20 the Stipulation and describe how it represents a fair,
21 just, and reasonable compromise of the issues in this
22 proceeding that are in the public interest . My testimony
23 supports the Parties ' recommendation that the Idaho
24 Public Utilities Commission ("Commission") approve the
25 Stipulation and all of its terms and conditions .
CSB REPORTING 12 Steward, STIP 2
208 . 890 . 5198 Rocky Mountain Power

1 III . BACKGROUND
2 Q. Please summarize the procedural background of
3 the 2024 GRC.
4 A. On May 31, 2024, the Company filed its 2024 GRC
5 with the Commission requesting authorization to increase
6 rates by $92 . 4 million, or approximately 26 . 8 percent.
7 The Company also requested approval to mitigate the rate
8 increase by phasing in the base net power cost increase
9 over two years . The Company proposed the first increase
10 of $66 . 7 million or 19 . 4 percent to take effect January
11 1, 2025, and a second increase of $25 . 7 million or 7 . 4
12 percent to take effect on January 1, 2026, for a total
13 increase of $92 . 4 million or 26 . 8 percent .
14 On October 24, 2024, the Parties began
15 negotiations with the Company. After the initial meeting
16 the Parties met several more times continuing to
17 negotiate the terms of the settlement .
18 On November 21, 2024, the Parties agreed to
19 draft terms of a Stipulated Settlement Agreement,
20 ("Stipulation") . On December 6, 2024, the Company filed a
21 Stipulation, signed by all the Parties to the 2024 GRC,
22 with the Commission with the intent of resolving all the
23 issues of the case .
24 IV. SETTLEMENT STIPULATION
25 Q. Please summarize the terms of the Stipulation.
CSB REPORTING 13 Steward, STIP 3
208 . 890 . 5198 Rocky Mountain Power

I A. The Parties agree to an overall base rate
2 increase of
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CSB REPORTING 14 Steward, STIP 3a
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1 $57 . 94 million or 16 . 8 percent effective January 1, 2025,
2 as set forth in Attachments A and B to the Stipulation.
3 The Parties also agree to mitigating the impacts of the
4 overall base increase by extending the recovery the
5 Energy Cost Adjustment Mechanism ("ECAM") deferral
6 balances as explained later in my testimony, which
7 reduces the impact of the overall rate increase by $32 . 5
8 million. Thus, the net rate change effective January 1,
9 2025 is $25 . 44 or 7 . 4 percent . The Parties agree that
10 this Stipulation represents a compromise among competing
11 interests and a resolution of the contested issues in
12 this proceeding. Any adjustment to PacifiCorp' s Initial
13 Filing on May 31, 2024 not incorporated into the
14 Stipulation directly or by reference would be resolved
15 without an adjustment or recommendation for the purposes
16 of this proceeding.
17 Q. Please describe the rate mitigation agreed to
18 by the Parties to address the overall rate increase .
19 A. The Parties agreed to mitigate the impacts of
20 the overall increase by extending the recovery the ECAM
21 deferral balances as follows :
22 the ECAM rates on Schedule 94 for recovery
23 of the 2023 deferred costs (Case No .
24 PAC-E-24-051) , will be reduced
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CSB REPORTING 15 Steward, STIP 4
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23 1 In the Matter of Rocky Mountain Power's Application for Approval of
$62.4 Million ECAM Deferral, Case No. PAC-E-24-05, Order No. 36207
24 (May 31, 2024) ; Order No 36367 on reconsideration (Oct. 18, 2024) .
The Company filed a notice of appeal on November 27, 2024.
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CSB REPORTING 16 Steward, STIP 4a
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1 by 50 percent, effective January 1, 2025 (or
2 rate effective date of this proceeding) with
3 the remaining balance as of June 1, 2025, to be
4 recovered over two years with the costs
5 deferred in 2024; and
6 The costs approved for recovery in the 2025
7 ECAM filing (for costs deferred in 2024 and
8 including the remaining balance from the 2024
9 ECAM filing) will be recovered over two years,
10 beginning June 1, 2025 .
11 Q. Does the Stipulation include an attachment to
12 show the agreed-upon calculation of the base rate change
13 and rate mitigation?
14 A. Yes . Attachment A to the Stipulation reflects
15 these calculations . As shown in Attachment A, the Parties
16 agree that the proposed total $57 . 94 million increase
17 reflects specific updates and adjustments to the
18 Company' s filed case, as well as an additional
19 non-specific adjustment related to a compromise of issues
20 on which resolution could not be reached.
21 Q. Please explain the Parties ' agreement on a
22 non-specific adjustment to PacifiCorp' s proposed revenue
23 requirement .
24 A. To resolve all outstanding revenue requirement
25 items not specifically addressed in the Stipulation, the
CSB REPORTING 17 Steward, STIP 5
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1 Parties agreed to a $7 . 3 million reduction to the
2 Company' s revenue requirement . This adjustment fully
3 resolves all contested
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CSB REPORTING 18 Steward, STIP 5a
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I revenue requirement items in this case not addressed in
2 an issue-specific settlement .
3 Q. Did the Parties agree on when the rate changes
4 reflected in the Stipulation will become effective?
5 A. Yes . The rate change attributable to the base
6 revenue requirement increase will be effective for
7 service on and after January 1, 2025 .
8 A. Rate of Return
9 Q. Please describe the Parties ' agreement on rate
10 of return.
11 A. The Parties agree to a rate of return of 7 . 25
12 percent, based on unspecified assumptions for capital
13 structure costs and components .
14 B. Capital Additions
15 Q. Please describe the Parties ' agreement on
16 capital additions .
17 A. The Parties agree with the inclusion of the
18 Company' s capital additions as set forth in its initial
19 filing on May 31, 2024, including the recovery of the
20 Gateway South and Gateway West Transmission projects, as
21 well as the Rock River I, Foot Creek II-IV, and Rock
22 Creek I wind projects, subject to the following:
23 PacifiCorp will file an attestation that
24 Gateway South and Gateway West Transmission
25 projects are in service prior to the rate
effective date;
CSB REPORTING 19 Steward, STIP 6
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1 Suspended/cancelled projects are removed from
2 rate base, reducing the revenue requirement by
3 $700 thousand; and
4 Parties reserve the right to review and provide
5 recommendations to the Commission in the
6 Company' s next general rate case on the
7 recovery of capital costs associated with the
8 transmission level line extension for Project
9 Specialized (Oregon) .
10 C. NPC and the ECAM
11 Q. Does the Stipulation specify the base amounts
12 for the SCAM?
13 A. Yes . The Parties recommend as part of the
14 overall Stipulation that the Commission approve the
15 following base ECAM amounts :
16 Net Power Costs - $2, 228, 403, 177 or $36 . 66/MWh
17 total-company, $128, 240, 000 or $36 . 91
18 Idaho-allocated.
19 Base Production Tax Credits - are equal to the
20 amount filed in the application at ($4 . 31) /MWh.
21 Base Load Change Adjustment Revenue ("LCAR") -
22 $6 .29/MWh.
23 As shown in Attachment A to the Stipulation,
24 Parties agreed to three adjustments to NPC as reflected
25 in the Company' s initial filing. First, an adjustment is
CSB REPORTING 20 Steward, STIP 7
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1 made for emergency purchases . Second, an adjustment is
2 made to remove the Washington Climate Commitment Act
3 allowance costs consistent with the Commission' s decision
4 in
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CSB REPORTING 21 Steward, STIP 7a
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1 Case No . PAC-E-24-05 . Finally, NPC has been updated for
2 the September 2024 Official Forward Price Curve .
3 Q. Did the Parties agree upon the sharing bands
4 for the SCAM?
5 A. Yes . The ECAM sharing band will remain at 90
6 percent customer/10 percent company. The Parties agree to
7 host workshops to evaluate the sharing band in the ECAM
8 and explore alternative risk sharing/incentive mechanisms
9 prior to the Company' s next general rate case .
10 Q. Did the Parties agree upon the treatment of
11 wheeling revenues?
12 A. Yes . Beginning with 2025, the ECAM will include
13 a true-up for Open Access Transmission Tariff ("OATT")
14 wheeling revenues . The amount of wheeling revenues in
15 base rates is $188, 219, 298 total company, $10, 331, 275
16 ($2 . 97/MWh) Idaho allocated. The wheeling revenue true-up
17 will be subject to the ECAM sharing band.
18 D. Catastrophic Fire Fund, Excess Liability Premium
19 Costs , and the Insurance Cost Adjustment
20 Q. Did the Stipulation address the Catastrophic
21 Fire Fund, excess liability insurance premium costs, and
22 the Company' s proposed Insurance Cost Adjustment ("ICA") ?
23 A. Yes . With respect to the Catastrophic Fire
24 Fund, the Company has agreed to withdraw this proposal
25 but reserves the right to propose the fund in a future
CSB REPORTING 22 Steward, STIP 8
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1 proceeding. With respect to the excess liability
2 insurance premium costs,
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CSB REPORTING 23 Steward, STIP 8a
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1 the Parties agree that these costs are set at $9, 806, 312
2 (Idaho allocated) . Excess liability insurance premium
3 costs above or below the amount in base rates will be
4 tracked separately and prudently incurred insurance costs
5 above the amount in base rates will be amortized in the
6 Company' s next general rate case . The deferral will be
7 reevaluated when the Company files its next rate case in
8 conjunction with any potential insurance mechanism.
9 Finally, with respect to the ICA, excess liability
10 insurance premium costs of $9, 806, 312 and amortization of
11 $2, 605, 627 of annual deferred premium amortization
12 ($12, 411, 639 in total) will be recovered through the ICA
13 but the surcharge will not be a separate line item on
14 customer bills . Beginning January 1, 2025, the ICA clause
15 revenues will be spread in the manner proposed in the
16 Company' s initial filing, based on a percentage of
17 overall revenues .
18 E. Voluntary Renewable Energy Credit Option Tariff
19 Q. Did the Parties reach agreement on the
20 Company' s proposed Voluntary Renewable Energy Credit
21 Option Tariff ("REC Program") ?
22 A. Yes . The Parties agree to the implementation of
23 the Voluntary Renewable Energy Credit Option Tariff
24 provided that future changes to the Renewable Energy
25 Credit Option Program Percentage, as defined in the
Direct Testimony of
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1 Company witness Craig M. Eller, be approved by the
2 Commission. The Company will also include its annual
3 generation from hydro, wind, solar, geothermal, biogas,
4 and biomass as a percentage of total system generation in
5 its annual RRA filing. Finally, REC revenues being held
6 for return to non-participants will be held in a deferral
7 account earning the Commission approved customer deposit
8 rate .
9 F. Pricing and Cost of Service
10 Q. Does the Stipulation include a comprehensive
11 agreement on pricing and cost of service issues among the
12 Parties?
13 A. Yes . The Parties have agreed on pricing and
14 cost of service parameters for the stipulated revenue
15 requirement, which are described below. The estimated
16 rate spread and rates calculated using these parameters
17 are reflected in Attachment B to the Stipulation.
18 Q. Please describe the Parties ' agreement on rate
19 spread for the overall net rate increase.
20 A. Parties agree that rate spread will be
21 established using the Company' s proposed class cost of
22 service study included in its initial filing on May 31,
23 2024, subject to a cap of 110 percent of the overall
24 average base rate increase with a floor of zero percent
25 price change for all classes . The cap and floor
CSB REPORTING 25 Steward, STIP 10
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1 percentage allocations will be applied to the base rate
2 increase prior to the application of the ICA
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CSB REPORTING 26 Steward, STIP 10a
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1 and ECAM rate changes identified above .
2 Q. Have the Parties reached an agreement on
3 residential rate design?
4 A. Yes . The Parties resolved all issues on residential
5 rate design by agreeing to the following:
6 Parties agree that the Schedule 1 and Schedule
7 36 Customer Service Charges will continue to
8 increase according to the timing specified in
9 the Residential Rate Modernization Plan (Case
10 No . PAC-E-22-15) with commensurate decreases in
11 Energy Charges on June 1 each year of the plan;
12 and
13 Parties agree that Schedule 1 Energy Charges
14 will maintain the present 17 percent
15 differential in tiers in both seasons .
16 Q. Did the Parties also resolve rate design issues
17 for non-residential customers?
18 A. Yes . The Parties agreed to the following
19 changes from PacifiCorp' s filed case for rate design for
20 non-residential rate schedules :
21 The Company' s proposed rate design will be used
22 for rate schedules other than Schedule 1 and
23 Schedule 36;
24 The Company' s proposal to update time of use
25 periods and replace demand charges with
CSB REPORTING 27 Steward, STIP 11
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1 time-varying seasonal energy charges will apply
2 to Schedules 35 and 35A;
3 Schedule 24 should be eliminated; and
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CSB REPORTING 28 Steward, STIP 11a
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1 A 30, 000 kW load limit will apply for Schedules
2 6, 6A, 23, and 23A.
3 Q. Did Parties agree to tariff rule changes?
4 A. Yes . The Parties agree that the Company' s
5 proposed tariff rule changes as described in the Direct
6 Testimony of Company witness Robert M. Meredith be
7 approved, specifically:
8 The additional language, as shown on page 74 of
9 Exhibit No . 58 attached to the Direct Testimony
10 of Company witness Meredith, to the Rule 3 -
11 Electric Service Agreements tariff to clarify
12 that Customers assume contract minimum bills as
13 a condition of service when assuming an
14 existing point of delivery; and
15 The revisions, as shown on pages 75 through 77
16 of Exhibit No . 58 attached to the Direct
17 Testimony of Company witness Meredith, to the
18 Rule 12 - Line Extension tariff to change the
19 Company' s definition of extension Limits, and
20 require that customers requiring more than
21 1, 000 kilovolt-amperes ("kVA") must pay their
22 line extension advance prior to the start of
23 construction.
24 G. Stay-Out Provision
25 Q. Did the Company agree to a rate case stay out
CSB REPORTING 29 Steward, STIP 12a
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1 provision?
2 A. Yes . The Company will not file a general rate
3 case with new rates effective before January 1, 2027 .
4 However, as part of this agreement, Parties have agreed
5 that in lieu
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CSB REPORTING 30 Steward, STIP 12a
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I of filing a general rate case in 2025, PacifiCorp will be
2 allowed to record as a regulatory asset the depreciation
3 expense and return on for Rock Creek II wind facility
4 until the next general rate case .
5 Q. What is the Rock Creek II wind project?
6 A. Rock Creek II is a 400 megawatt wind project
7 selected as a build-transfer agreement in the 2020
8 All-Source Request for Proposals and is in construction
9 by Invenergy with an expected in-service date in
10 September 2025 .
11 As provided in the agreement, PacifiCorp will
12 be allowed to defer the depreciation expense and return
13 on Rock Creek II wind facility in a regulatory asset
14 account, with recovery and amortization to be determined
15 in the Company' s next general rate case filing. During
16 the deferral period NPC and production tax credit
17 benefits will flow through ECAM but will be tracked and
18 subject to offset any disallowances on recovery of the
19 Rock Creek II deferral . Calculation of the NPC benefits
20 can be addressed at the time PacifiCorp seeks recovery of
21 the deferral .
22 H. Additional Terms
23 Q. Did the Parties reach agreement regarding
24 certain costs as part of the Stipulation?
25 A. Yes . The Parties agreed that Western Resource
CSB REPORTING 31 Steward, STIP 13
208 . 890 . 5198 Rocky Mountain Power

1 Adequacy Costs/Committee of State Regulatory costs will
2 be deferred for later recovery once benefits are
3 realized. The Parties
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CSB REPORTING 32 Steward, STIP 13a
208 . 890 . 5198 Rocky Mountain Power

1 also agreed that the Intervenor funding balance will be
2 amortized over four years at $10, 000 per year.
3 Q. Did Parties reach agreement on holding
4 workshops prior to the next filed general rate case?
5 A. Yes . Specifically, the Parties agreed that
6 prior to the next general rate case :
7 The Company and interested parties will hold
8 workshops on the Company' s risk
9 management/hedging practices; and
10 The Company will hold a workshop with Staff and
11 other interested parties to evaluate weather
12 normalization methods of consumption.
13 Q. Did the Company agree to perform a study as
14 part of the Stipulation?
15 A. Yes . The Company will perform a study, prior to
16 filing the next general rate case, on the costs and
17 revenues associated with transmission level voltage line
18 extensions serving very large individual customers who
19 signed agreements (in 2020 or later) with the Company for
20 a load request of 25 megawatts or greater. The study
21 should review FERC rules, state tariffs and Company
22 policies that govern how costs and revenues are situs
23 assigned or system allocated; analyze how those rules
24 were applied to existing projects; and analyze how costs
25 and revenues might shift under different allocation
principles .
CSB REPORTING 33 Steward, STIP 14
208 . 890 . 5198 Rocky Mountain Power

1 Q. Finally, did the Company agree to allow
2 representatives of PIIC and IIPA to attend its ongoing
3 workshops addressing wildfire risk regulatory mechanisms?
4 A. Yes . Since September 2023, the Company has been
5 holding workshops with stakeholders across its six
6 jurisdictions to discuss the impacts of wildfire risks on
7 costs, including insurance, and the mechanisms that can
8 address the adverse impacts of these costs on the Company
9 and its customers . PIIC and IIPA will be allowed to have
10 representation in the Wildfire Insurance Working Group
11 subject to executing the Wildfire Insurance Working Group
12 nondisclosure agreement .
13 I . General Terms
14 Q. If the Commission rejects any part of the
15 Stipulation, are the Parties entitled to reconsider their
16 participation in the Stipulation?
17 A. Yes . The Parties have negotiated the
18 Stipulation as an integrated document. If the Commission
19 rejects all or any material portion of the Stipulation or
20 imposes additional material conditions, any of the
21 Parties are entitled to withdraw from the Stipulation.
22 Q. Are the agreements reflected in the Stipulation
23 binding on the Parties in future proceedings?
24 A. No . The Parties agree that by entering into the
25 Stipulation, no Party approved, admitted, or consented to
CSB REPORTING 34 Steward, STIP 15
208 . 890 . 5198 Rocky Mountain Power

1 the facts, principles, methods, or theories employed by
2 any other Party in arriving at the terms of this
3 Stipulation, other than those specifically identified and
4 resolved in the body of the Stipulation. The Stipulation
5 addresses the reasonableness of the costs in rates for
6 the test period and the Parties agree that no provision
7 of the Stipulation is appropriate for resolving issues
8 for future periods or proceedings, except as specifically
9 identified in the Stipulation.
10 V. REASONABLENESS OF THE STIPULATION
11 Q. What is the basis for the Stipulation?
12 A. The Stipulation is the culmination of extensive
13 work by all Parties to review the Application, submit
14 discovery, evaluate positions, and participate in
15 intensive settlement discussions . Parties had multiple
16 settlement conferences and resolved their differences
17 incrementally through dialogue and negotiations .
18 Q. Why should the Commission adopt the
19 Stipulation?
20 A. The Stipulation represents a reasonable
21 compromise of the numerous and complex issues raised in
22 this case for many reasons, including, but not limited to
23 the fact that the Stipulation:
24 an overall base rate increase of $57 . 94 million
25 or 16 . 8 percent, a reduction from the 26 . 8
percent increase PacifiCorp initially sought;
CSB REPORTING 35 Steward, STIP 16
208 . 890 . 5198 Rocky Mountain Power

1 mitigates the impacts of the overall base
2 increase with extending the recovery the ECAM
3 deferral balances as I have explained above,
4 which reduces the impact of the overall rate
5 increase by $32 . 5 million . The net rate change
6 effective January 1, 2025 is $25 . 44 or 7 . 4
7 percent;
8 resolves pricing and cost of service issues in
9 a manner that is fair to all customer classes;
10 permits development of additional information
11 and analysis to inform decisions on issues
12 relevant to this case in future filings;
13 outlines a collaborative process to review
14 potential changes to the ECAM; and
15 imposes a rate-case stay-out that will provide
16 price stability for customers by precluding
17 another general rate change before January 1,
18 2027 .
19 While the above list is not an exhaustive
20 description of every term in the Stipulation, the
21 compromises on the remaining issues are fair, just and
22 reasonable .
23 VI . RECOMMENDATION
24 Q. Please summarize the Company' s recommendation.
25 A. The Stipulation is a compromise of the disputed
CSB REPORTING 36 Steward, STIP 17
208 . 890 . 5198 Rocky Mountain Power

1 claims and positions of the Parties on all issues in this
2 proceeding and represents a fair, just, and reasonable
3 compromise of these issues . Based on this representation
4 I respectfully
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CSB REPORTING 37 Steward, STIP 17a
208 . 890 . 5198 Rocky Mountain Power

1 request that the Commission issue an order approving an
2 increase to base rates of $57 . 94 million or 16 . 8 percent
3 effective January 1, 2025, adopting all other terms and
4 conditions of the Stipulation as filed and approve the
5 compliance tariff sheets provided as Exhibit No . 61 to my
6 testimony.
7 Q. Does this conclude your testimony?
8 A. Yes .
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CSB REPORTING 38 Steward, STIP 18
208 . 890 . 5198 Rocky Mountain Power

1 (The following proceedings were had in
2 open hearing. )
3
4 MR. DALLAS : Thank you, and that concludes
5 my questions and Ms . Steward is available for any
6 cross-examination or questions from the Bench.
7 COMMISSIONER LODGE : Great, thank you,
8 Mr. Dallas .
9 We will start with Mr. Olsen, any
10 questions?
11 MR. OLSEN: No questions .
12 COMMISSIONER LODGE : Mr. Williams .
13 MR. WILLIAMS : No questions .
14 COMMISSIONER LODGE : Thank you.
15 Mr. Triplett .
16 MR. TRIPLETT : No questions .
17 COMMISSIONER LODGE : Questions from the
18 Commission? Okay, hearing none, we really appreciate
19 your time here . Thank you for coming.
20 THE WITNESS : Thank you.
21 COMMISSIONER LODGE : You bet .
22 (The witness left the stand) .
23 COMMISSIONER LODGE : Back to you,
24 Mr. Dallas, any further witnesses?
25 MR. DALLAS : That concludes the Company' s
CSB REPORTING 39 STEWARD
208 . 890 . 5198

1 witnesses .
2 COMMISSIONER LODGE : Great, thank you. I
3 will next the floor turn it over to Mr. Olsen from the
4 Idaho Irrigation Pumpers Association.
5 MR. OLSEN: Thank you, Chair Lodge . We
6 would like to call Lance Kaufman remotely to the stand.
7 Lance, if you could show yourself and
8 unmute .
9 MR. KAUFMAN: Okay, I 'm here .
10
11 LANCE KAUFMAN,
12 produced as a witness at the instance of the Idaho
13 Irrigation Pumpers Association, having been first duly
14 sworn to tell the truth, was examined and testified as
15 follows :
16
17 DIRECT EXAMINATION
18
19 BY MR. OLSEN:
20 Q Mr. Kaufman, could you please state and
21 spell your name for the record?
22 A My name is Lance Kaufman, K-a-u-f-m-a-n.
23 Q And what position do you testify at this
24 hearing?
25 A I am a principal of Western Economics and
CSB REPORTING 40 KAUFMAN (Di)
208 . 890 . 5198 IIPA

1 I 'm consulting as an expert witness on behalf of IIPA.
2 Q And you mean by IIPA the Idaho Irrigation
3 Pumpers Association?
4 A Yes .
5 Q Thank you. Did you prepare testimony that
6 was filed with the Commission dated December 12th, 2024,
7 in support of --
8 A I did.
9 Q I apologize -- in support of the
10 stipulation that the Commission is considering?
11 A Yes, I did.
12 Q Are there any corrections or additions
13 that need to be made to that testimony?
14 A No .
15 Q If I were to ask you the same questions
16 that were asked in your prefiled testimony, would your
17 answers still be the same?
18 A Yes .
19 MR. OLSEN: Mr. Lodge, we would move to
20 admit the prefiled testimony of Lance E . Kaufman into the
21 record and have it spread as if read.
22 COMMISSIONER LODGE : Thank you, and
23 without objection, we will spread the testimony across
24 the record as if read. Thank you.
25
CSB REPORTING 41 KAUFMAN (Di)
208 . 890 . 5198 IIPA

1 (The following prefiled direct testimony
2 of Mr. Lance Kaufman is spread upon the record. )
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CSB REPORTING 42 KAUFMAN (Di)
208 . 890 . 5198 IIPA

1 I . INTRODUCTION AND SUMMARY
2 Q PLEASE STATE YOUR NAME AND OCCUPATION.
3 A My name is Lance D. Kaufman. I am a
4 consultant representing utility customers before state
5 public utility commissions in the Northwest and
6 Intermountain West . My witness qualification statement
7 can be found at Exhibit 201 .
8 Q PLEASE IDENTIFY THE PARTY ON WHOSE BEHALF
9 YOU ARE TESTIFYING.
10 A I am testifying on behalf of the Idaho
11 Irrigation Pumper' s Associates, Inc . ("IIPA") . IIPA is a
12 non-profit trade association whose members are large
13 energy users in the Idaho, including customers receiving
14 electric services from PacifiCorp ("PAC" or "Company") .
15 Q WHAT IS THE PURPOSE OF YOUR TESTIMONY?
16 A I provide testimony on the following
17 items :
18 The proposed settlement .
19 Q PLEASE SUMMARIZE YOUR RECOMMENDATIONS .
20 A I make the following recommendations :
21 Find the proposed settlement results in fair,
22 just, and reasonable rates .
23 II . SUMMARY OF IIPA PARTICIPATION IN THIS CASE
24 Q PLEASE SUMMARIZE IIPA' S PARTICIPATION,
25 ANALYSIS, AND FINDINGS IN THIS CASE .
Case No . PAC-E-24-04 43 Kaufman, L Di 1
12/12/2024 IIPA

1 A IIPA reviewed the opening testimony and
2 workpapers of all company witnesses, issued discovery on
3 cost of capital, test year expenses, and cost of service,
4 and developed positions on potentially appropriate
5 adjustments to the Company' s filed case . Prior to
6 participation in settlement discussions IIPA identified
7 and quantified potential adjustments related to the
8 following issues :
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Case No . PAC-E-24-04 44 Kaufman, L Di 1a
12/12/2024 IIPA

1 1 . Cost of capital .
2 2 . Rate base .
3 3 . Expenses .
4 4 . Cost of service, and
5 5 . Rate spread.
6 IIPA participated in multiple settlement discussions
7 in October and November, 2024 regarding this case .
8 During these discussions all issues considered by IIPA
9 were raised and discussed by the parties, including PAC.
10 PAC offered reasonable responses to many of the issues
11 and concerns raised by the parties . Between settlement
12 discussion IIPA met with members and other intervening
13 parties to discuss issues in the case . IIPA proposed
14 several of the compromises that led to the final
15 settlement proposal and finds the final proposal contains
16 terms and conditions that are acceptable to the IIPA,
17 provides an appropriate balance between the participating
18 parties, and will likely result in fair, just and
19 reasonable rates .
20 Q PLEASE DESCRIBE YOUR ANALYSIS OF PAC' S
21 COST OF CAPITAL.
22 A IIPA submitted discovery and performed
23 analysis of PAC ' s cost of capital, including estimates of
24 cost of equity and evaluation of capital structure and
25 cost of debt . IIPA evaluated cost of capital using
Case No . PAC-E-24-04 45 Kaufman, L Di 2
12/12/2024 IIPA

1 discounted cash flow and capital pricing asset models .
2 The cost of equity agreed to in the stipulation was
3 contained within the range of estimates of IIPA' s cost of
4 equity analysis . IIPA reviewed the company' s credit
5 position, debt coverage, debt issuances, and historical
6 changes in capital structure . IIPA identified capital
7 structure as a potential area of contention, with the
8 Company' s requested capital structure containing an
9 equity ratio exceeding its actual
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Case No . PAC-E-24-04 46 Kaufman, L Di 2a
12/12/2024 IIPA

1 equity ratio . The settled return on rate base is
2 consistent with a return on equity, cost of debt, and
3 capital structure within the range that IIPA' s analysis
4 indicates is reasonable .
5 Q PLEASE DESCRIBE YOUR REVIEW OF PAC ' S RATE
6 BASE .
7 A IIPA investigated the annualization and
8 prudence of major plant additions included as pro-forma
9 adjustments and historic plant additions related to
10 wildfire restoration.
11 Q PLEASE DESCRIBE YOUR REVIEW OF PAC' S
12 EXPENSES .
13 A IIPA reviewed PAC' s base year expense
14 ledgers and test year adjustments . IIPA identified
15 potential issues with executive compensation, bonuses,
16 injuries and damages, outside services, and catastrophic
17 fire fund.
18 Q PLEASE DESCRIBE YOUR REVIEW OF PAC' S COST
19 OF SERVICE MODEL.
20 A IIPA identified several potential changes
21 to PAC ' s cost of service model . These changes generally
22 reduced the cost of demand in summer months .
23 Q PLEASE DESCRIBE YOUR REVIEW OF PAC ' S RATE
24 SPREAD.
25 A IIPA' s revised cost of service model
Case No . PAC-E-24-04 47 Kaufman, L Di 3
12/12/2024 IIPA

1 indicated that the Company' s filed study allocated
2 excessive costs to Irrigation Schedule 10 . The
3 stipulated rate spread results in a rate increase for
4 Schedule 10 that is in between the rate increase
5 indicated by IIPA' s study and that indicated by PAC ' s
6 study, and is a reasonable compromise among parties .
7 Q PLEASE DESCRIBE YOUR REVIEW OF PAC ' S RATE
8 DESIGN.
9 A PAC proposed rate design for Irrigation
10 Schedule 10 increased fixed charges, demand charges, and
11 energy charges by equal percentages . IIPA consulted with
12 IIPA members to confirm that this design is acceptable to
13 Schedule 10 customers .
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Case No . PAC-E-24-04 48 Kaufman, L Di 3a
12/12/2024 IIPA

1 Q ARE ALL OF IIPA' S CONCERNS ADDRESSED IN
2 THE PROPOSED SETTLEMENT?
3 A Yes, all of IIPA' s concerns are addressed
4 in the proposed settlement through changes to revenue
5 requirement and rate spread, or indirectly through
6 agreement for ongoing collaboration. IIPA recommends
7 that the commission find the proposed settlement to be
g fair, just, and reasonable and in the public interest .
9 Q HOW DOES THE SETTLEMENT AGREEMENT ADDRESS
10 IIPA' S CONCERNS?
11 A The agreed rate of return on rate base is
12 consistent with IIPA' s models . The non-specific revenue
13 requirement adjustments is sufficiently large to address
14 IIPA expense and rate base issues . With the exception of
15 the items explicitly called out in Paragraph 11, the
16 stipulation is worded in a manner that preserves IIPA' s
17 ability to continue to address disputed plant in future
18 rate cases . The rate spread is a fair compromise between
19 IIPA' s cost of service model and PAC' s cost of service
20 model .
21 Q WHAT IS YOUR RECOMMENDATION REGARDING THE
22 STIPULATION?
23 A IIPA recommends that the Commission find
24 the proposed settlement to be fair, just, and reasonable
25 and in the public interest .
Case No . PAC-E-24-04 49 Kaufman, L Di 4
12/12/2024 IIPA

1 Q DOES THIS CONCLUDE YOUR TESTIMONY
2 SUPPORTING THE STIPULATION?
3 A Yes .
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Case No . PAC-E-24-04 50 Kaufman, L Di 4a
12/12/2024 IIPA

1 (The following proceedings were had in
2 open hearing. )
3
4 MR. OLSEN: We now tender the witness,
5 Mr. Kaufman, for any questions or cross-examination .
6 COMMISSIONER LODGE : Thank you.
7 Mr. Dallas .
8 MR. DALLAS : No questions from the
9 Company.
10 COMMISSIONER LODGE : You bet .
11 Mr. Williams .
12 MR. WILLIAMS : No questions .
13 COMMISSIONER LODGE : Mr. Triplett .
14 MR. TRIPLETT : No questions .
15 COMMISSIONER LODGE : From the Commission.
16 COMMISSIONER ANDERSON: No questions .
17 COMMISSIONER LODGE : All right, thank you,
18 sir. I appreciate your time . You' re excused, thank you.
19 THE WITNESS : Thank you.
20 (The witness left the stand. )
21 COMMISSIONER LODGE : Mr. Williams, do you
22 have any witnesses for us today?
23 MR. WILLIAMS : Commissioner Lodge, no, I
24 do not . What PIIC did, PIIC, is file three pages of
25 comments on December 19 . They are part of the record
CSB REPORTING 51 KAUFMAN
208 . 890 . 5198

1 already and PacifiCorp Industrial Customers are General
2 Service High Voltage Customer Schedule 9 that shows up on
3 the schedules, and our customer groups support the
4 settlement stipulation and recommend that the Commission
5 find that the stipulation is in the public interest .
6 COMMISSIONER LODGE : Thank you. Are there
7 questions of Mr. Williams?
8 From the Commission?
9 Great, thank you, sir.
10 Next we will go to our Commission Staff,
11 Mr. Triplett .
12 MR. TRIPLETT : Commission Staff would call
13 its witness Mr. Donn English to the stand.
14
15 DONN ENGLISH,
16 produced as a witness at the instance of the Staff,
17 having been first duly sworn to tell the truth, was
18 examined and testified as follows :
19
20 DIRECT EXAMINATION
21
22 BY MR. TRIPLETT :
23 Q Mr. English, could you please state your
24 name for the record and spell your last name?
25 A My name is Donn English, E-n-g-l-i-s-h.
CSB REPORTING 52 ENGLISH (Di)
208 . 890 . 5198 Staff

1 Q And could you please describe your current
2 employment?
3 A I am the program manager overseeing the
4 audit department within the utilities division at the
5 Commission.
6 Q Are you the same Donn English who
7 previously filed testimony in support of the stipulation
8 consisting of about 15 pages and Exhibit 101 on
9 December 18th, 2024?
10 A Yes, I am.
11 Q Does Exhibit 101 accurately reflect your
12 work experience and employment history?
13 A Yes, it does .
14 Q Turning to that direct testimony, if I
15 asked you the same questions that appear in that direct
16 testimony, would your answers still be the same?
17 A Yes, they would.
18 Q Is there anything that you would like to
19 add to that direct testimony you previously filed?
20 A No, there is not .
21 MR. TRIPLETT : Thank you, Mr. English.
22 Mr. Chair, I would move to admit
23 Mr. English' s direct testimony and to spread that
24 testimony on the record and then open Mr. English to
25 cross-examination by the Commission or other parties .
CSB REPORTING 53 ENGLISH (Di)
208 . 890 . 5198 Staff

1 COMMISSIONER LODGE : Great, thank you, and
2 without objection, we will spread Mr. English' s
3 testimony, direct testimony, across the record as if
4 read.
5 (The following prefiled direct testimony
6 of Mr. Donn English is spread upon the record. )
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CSB REPORTING 54 ENGLISH (Di)
208 . 890 . 5198 Staff

1 Q. Please state your name and business address?
2 A. My name is Donn English. My business address
3 is 11331 W. Chinden Blvd. , BLDG 8, STE 201-A, Boise,
4 Idaho 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 Program Manager overseeing
8 the Accounting and Finance Department in the Utilities
9 Division.
10 Q. Please describe your educational background and
11 professional experience .
12 A. I was hired by the Commission in 2003 and I
13 have provided testimony and recommendations in numerous
14 proceedings . My educational background and professional
15 experiences are provided in Exhibit No . 101 .
16 Q. What is the purpose of your testimony in this
17 proceeding?
18 A. The purpose of my testimony is to describe
19 Rocky Mountain Power' s ("Rocky Mountain" or "Company")
20 Application to increase its rates and charges for
21 electric service in Idaho, describe the proposed
22 Settlement Stipulation ("Settlement") reached by the
23 parties in this case, and explain Staff' s support for the
24 proposed Settlement .
25 Q. How is your testimony organized?
CASE NO. PAC-E-24-04 55 ENGLISH, D. (Stip) 1
12/18/2024 STAFF

1 A. My testimony is organized under the following
2 headings :
3 Background Page 2
4 Staff Investigation Page 4
5 Settlement Evaluation Page 6
6 Settlement Overview Page 7
7 Background
8 Q. Please describe Rocky Mountain' s Application.
9 A. Rocky Mountain made its original filing with
10 the Idaho Public Utilities Commission on May 31, 2024,
11 requesting authority to increase its revenue by $92 . 4
12 million, or approximately 26 . 8 percent . The Company
13 requested to mitigate the proposed increase by phasing in
14 the base net power cost increase over two years . The
15 first-year increase of $66 . 7 million, or 19 . 4 percent,
16 would be effective on January 1, 2025, while a second
17 increase of $25 . 7 million, or 7 . 4 percent, would take
18 effect on January 1, 2026 . The Company' s proposed
19 increase was based on a historical twelve-month period
20 ending December 31, 2023, adjusted for known and
21 measurable changes through December 31, 2024 . The
22 Company proposed a hypothetical capital structure with
23 50 . 0 percent equity and a return on equity of 10 . 3
24 percent, for an overall weighted average cost of capital
25 of 7 . 69 percent .
The Company' s Application reflected net power
CASE NO. PAC-E-24-04 56 ENGLISH, D. (Stip) 2
12/18/2024 STAFF

1 costs ("NPC") of $2 . 382 billion on a total-Company basis
2 and $136 . 7 million on an Idaho jurisdictional basis . The
3 Company also requested a modification to the sharing band
4 in the Energy Cost Adjustment Mechanism ("ECAM") so that
5 95 percent of the NPC variances will be passed through
6 the mechanism and the remaining five percent of the NPC
7 variances will be excluded. Additionally, the Company
8 proposed to remove the REC revenue adjustment from the
9 ECAM calculation and instead offer a new voluntary
10 renewable energy credit option tariff and new REC revenue
11 adjustment tariff.
12 Finally, the Company requested approval of two
13 proposals it claimed would help position itself to
14 respond to financial risk posed by the increasing
15 frequency and severity of wildfires impacting its service
16 territory. The first proposal was for an Insurance Cost
17 Adjustment ("ICA") to recover the costs for excess
18 liability insurance through a separate surcharge . The
19 second proposal was to begin recovery of a Catastrophic
20 Fire Fund to create a multi-state risk pool for potential
21 catastrophic events where third-party liabilities are in
22 excess of the Company' s insurance coverage .
23 Q. How was the case processed after the Company' s
24 Application was received?
25 A. The Commission issued a combined Notice of
CASE NO. PAC-E-24-04 57 ENGLISH, D. (Stip) 3
12/18/2024 STAFF

1 Application and Notice of Intervention Deadline on June
2 20, 2024 . The Notice established an Intervention
3 Deadline of July 11, 2024 . Intervenor status was
4 subsequently granted to the Idaho Irrigation Pumpers
5 Association, Inc. ("IIPA") , P4 Production L. L.C. an
6 affiliation of Bayer Corporation ("Bayer") , and
7 Pacificorp Idaho Industrial Customers ("PIIC") . The
8 Idaho Conservation League also intervened, but later
9 withdrew from the case .
10 The Company, Staff, IIPA, Bayer, and PIIC
11 (collectively the "Parties") participated in two
12 in-person settlement conferences and several virtual
13 meetings, and on December 6, 2024, a comprehensive
14 Settlement Stipulation was filed with the Commission,
15 signed by all parties .
16 Staff Investigation
17 Q. What type of investigation did Staff conduct to
18 evaluate the Company' s rate increase request?
19 A. Staff' s approach in any general rate case is to
20 extensively review the Company' s Application and
21 associated testimony, attachments, exhibits, and
22 workpapers; identify adjustments to its revenue
23 requirement, revenue normalization, rate spread, and rate
24 design; and prepare to file testimony for a fully
25 litigated proceeding. There were 18 Staff members
CASE NO. PAC-E-24-04 58 ENGLISH, D. (Stip) 4
12/18/2024 STAFF

1 analyzing this case, including auditors, engineers,
2 utility analysts, and consumer investigators, and
3 supervisors . Staff auditors reviewed
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CASE NO. PAC-E-24-04 59 ENGLISH, D. (Stip) 4a
12/18/2024 STAFF

1 the Company' s 2023 results of operations, 2024 capital
2 budgets, capital spending trends, operations and
3 maintenance ("0&M") expenses and trends and verified all
4 of the Company' s calculations and assumptions regarding
5 the overall revenue requirement . The auditors reviewed
6 thousands of transactions, selected samples, and
7 performed transaction testing in accordance with standard
8 audit practices . Staff reviewed the Company' s labor
9 expense, incentive plans, and employee benefits to ensure
10 the appropriate level of expenditures are included in
11 rates .
12 Staff reviewed both completed and proposed
13 Company investments to determine the prudence of capital
14 additions . Expenditures including pension expense,
15 salaries, and 0&M expense were also examined.
16 Additionally, Staff evaluated the Company' s cost of
17 capital, capital structure, class cost of service, rate
18 spread, and revenue normalization. In total, Staff
19 propounded 286 production requests, performed onsite
20 audits in Portland and Salt Lake City, and held several
21 virtual meetings with Company personnel as a part of its
22 comprehensive investigation. Staff also reviewed the
23 Company' s responses to 198 production requests submitted
24 by intervening parties . Based on its investigation,
25 Staff was prepared to defend over 81 proposed adjustments
CASE NO. PAC-E-24-04 60 ENGLISH, D. (Stip) 5
12/18/2024 STAFF

1 to the Company' s revenue requirement in testimony and at
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CASE NO. PAC-E-24-04 61 ENGLISH, D. (Stip) 5a
12/18/2024 STAFF

I Settlement Evaluation
2 Q. How did Staff determine that the overall
3 Settlement was reasonable?
4 A. In every settlement evaluation, Staff and other
5 parties must examine the risks of losing positions at
6 hearing and determine if the settlement agreement is a
7 better overall outcome . Staff must evaluate each
8 individual adjustment and determine the likelihood of the
9 Commission accepting or rejecting Staff' s rationale for
10 the adjustment . Ultimately, Staff' s intent in every
11 settlement conference is to negotiate the best possible
12 outcome for customers .
13 Q. Does Staff support the proposed Settlement as
14 reasonable?
15 A. Yes . After a comprehensive review of the
16 Company' s Application, thorough audit of the Company' s
17 books and records, and extensive negotiations with the
18 Parties to the case, Staff supports the proposed
19 Settlement . The proposed settlement is the result of
20 extensive negotiations with and compromises by of all the
21 Parties who often have conflicting interests . The
22 proposed Settlement offers a reasonable balance between
23 the Company' s opportunity to earn a reasonable return on
24 its investment and affordable rates for customers . Staff
25 believes the proposed Settlement, supported by the
CASE NO. PAC-E-24-04 62 ENGLISH, D. (Stip) 6
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1 Parties, is in the public interest; fair, just, and
2 reasonable; and should be approved by the Commission.
3 Settlement Overview
4 Revenue Requirement
5 Q. Would you please describe the terms of the
6 proposed Settlement?
7 A. The proposed Settlement provides a reduction in
8 the Company' s requested revenue requirement . Instead of
9 the Company' s proposed base rate increase of $92 . 4
10 million, or 26 . 8 percent, over two years, Idaho base
11 rates would increase by $57 . 94 million, or 16 . 8 percent,
12 effective January 1, 2025, with no additional base rate
13 increase for 2026 . Additionally, the Parties agree to an
14 estimated $32 . 5 million reduction to the Company' s
15 recovery of deferred power costs in the ECAM effective
16 simultaneously with the base rate increase, for a net
17 increase of $25 . 44 million, or 7 . 4 percent .
18 Q. How was the final revenue requirement
19 determined?
20 A. The final revenue requirement was agreed upon
21 through intense negotiations with the Parties . The
22 derivation of the final revenue requirement is shown
23 below:
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CASE NO. PAC-E-24-04 63 ENGLISH, D. (Stip) 7
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1
2 (millions)
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4 Requested Increase per Application $ 92 . 40
5 Change to Rate of Return - 7 . 250 $ (6 . 90)
6 Remove Catastrophic Fire Fund $ (11 . 10)
7 Reduce Net Power Costs $ (8 . 46)
8 Remove Susp. /Cancelled Projects $ (0 . 70)
9 Unspecified Adjustment $ (7 . 30)
10 Total Adjustments $ (34 . 46)
11 Total Revenue Requirement Change $ 57 . 94
12 Reduction to ECAM Recovery (est. ) $ (32 . 50)
13 Net Rate Change Jan 1 , 2025 (est. ) $ 25 . 44
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15 Q. Please describe how the Settlement treats the
16 Company' s capital structure and rate of return.
17 A. The Settlement reduces the Company' s overall
18 rate of return from the proposed 7 . 69 percent to 7 .25
19 percent . The capital structure, cost of debt, and return
20 on equity are not specified in the Settlement . This
21 adjustment reduces the Company' s Application by $6 . 9
22 million.
23 Q. Please describe the provisions in the
24 Settlement as they relate to the Company' s rate base .
25 A. The Parties agree that the revenue increase in
CASE NO. PAC-E-24-04 64 ENGLISH, D. (Stip) 8
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1 the Settlement does not represent agreement or acceptance
2 by any Party on any specific revenue requirement
3 methodology. The Settlement is explicitly silent on the
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CASE NO. PAC-E-24-04 65 ENGLISH, D. (Stip) 8a
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1 use of an average rate base methodology or a terminal
2 (year-end) methodology.
3 With regards to specific capital projects
4 included in the Settlement revenue requirement, the
5 Parties agree that the base rate includes recovery of the
6 Gateway South and Gateway West transmission projects, as
7 well as the Rock River I, Foot Creek II-IV, and Rock
8 Creek I wind projects . The Company agrees to file an
9 attestation that the transmission projects are in service
10 prior to the rate effective date . The Parties also agree
11 that the Company' s revenue requirement should be reduced
12 by approximately $700, 000 for projects included in the
13 Company' s Application that were either suspended or
14 cancelled during 2024 .
15 The Parties reserve the right to review and
16 provide recommendations to the Commission in the
17 Company' s next general rate case on the recovery of
18 capital costs associated with a large transmission level
19 line extension in Oregon (Project Specialized) .
20 Lastly, the Parties agree to reduce the revenue
21 requirement proposed in the Company' s Application by $7 . 3
22 million for an unspecified ("black box") adjustment to
23 account for remaining issues in which no agreement was
24 explicitly reached, but rather as a compromise for all
25 Parties to accept the Settlement .
Q. Please describe the adjustment for the
CASE NO. PAC-E-24-04 66 ENGLISH, D. (Stip) 9
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1 Catastrophic Fire Fund and any provisions in the
2 Settlement for Insurance Premiums?
3 A. In its application, the Company included $11 . 10
4 million for recovery through a surcharge for Idaho ' s
5 participation in a proposed Catastrophic Fire Fund. The
6 Catastrophic Fire Fund would assist the Company with the
7 growing risk of wildfire liability and would be available
8 for the Company to pay large claims that exceed the
9 Company' s insurance coverage . In the Settlement, the
10 Company withdrew its proposal, and the stipulated revenue
11 requirement removes the $11 . 10 million from the Company' s
12 Application. However, the Company reserves the right to
13 propose the mechanism in a future proceeding.
14 Although there is no specific revenue
15 requirement adjustment for insurance premiums in the
16 Settlement, the Settlement creates an Insurance Cost
17 Adjustment which will allow the Company to recover the
18 costs for excess liability insurance . The Company will
19 begin recovery of approximately $9 . 8 million of excess
20 liability insurance premium costs and an additional $2 . 6
21 million of annual deferred insurance premium amortization
22 through the ICA.
23 Q. Please explain the adjustment to the Company' s
24 NPC.
25 A. The Company' s Application included total Net
Power Costs of $1 . 382 billion on a total system basis, or
CASE NO. PAC-E-24-04 67 ENGLISH, D. (Stip) 10
12/18/2024 STAFF

1 approximately $136 . 7 million on an Idaho-allocated basis,
2 which represents an increase of $1 . 015 billion, or 74
3 percent, compared to the NPC currently embedded in rates .
4 The NPC included in the Settlement updates the Company' s
5 total NPC based on the September 2024 Official Forward
6 Price Curve and completely removes costs associated with
7 the Washington Climate Commitment Act ("CCA") from base
8 rates . During the Company' s next ECAM filing, Staff will
9 review the SCAM deferral balance to ensure that Idaho
10 customers will not pay increased rates encumbered by the
11 CCA.
12 The total NPC agreed upon in the Settlement is
13 approximately $2 .228 billion on a system basis or $128 .24
14 million allocated to Idaho, which is a reduction to the
15 Company' s case of $8 . 46 million.
16 Q. Please explain the Reduction to ECAM Recovery
17 used to offset the base rate increase .
18 A. The Parties agree that the Company will reduce
19 the recovery of 2023 deferred ECAM balance approved in
20 Order No . 36207, Case No . PAC-E-24-05, by 50 percent to
21 offset the base rate increase in this case . The
22 remaining balance as of June 1, 2025, will be included
23 with the 2024 SCAM balance and amortized and recovered
24 over two years, beginning June 1, 2025 .
25 Rate Spread and Rate Design
CASE NO. PAC-E-24-04 68 ENGLISH, D. (Stip) 11
12/18/2024 STAFF

1 Q. Please explain the rate spread and rate design
2 contained in the Settlement .
3 A. The Parties agreed to the rate spread provided
4 in Attachment B to the Settlement . The Parties agreed to
5 use the Company' s proposed class cost of service study,
6 with a cap of 110 percent and a floor of zero percent
7 applied to the base rate increase prior to the
8 application of the ICA and ECAM rate changes . No class
9 of customer will see an increase greater than 110 percent
10 of the overall average base rate increase, and no
11 customer class will see a decrease .
12 Q. Why does Staff support the proposed cap and
13 floor in the Settlement?
14 A. The Settlement was a compromise amongst all
15 Parties . The proposed cap and floor in the Settlement
16 provide for gradual movement towards cost of service
17 while also maintaining the balance necessary to achieve
18 buy in from all Parties . While other Parties may have
19 been more supportive of a uniform percentage increase, it
20 was important to Staff that rates move towards cost of
21 service, and the Settlement provides that movement .
22 Q. Are there any rate design issues in the
23 Settlement that you would like to discuss?
24 A. The Settlement accepts the Company' s proposed
25 rate design for all Schedules except Schedule 1
CASE NO. PAC-E-24-04 69 ENGLISH, D. (Stip) 12
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1 (Residential) and Schedule 36 (Residential Optional Time
2 of Day) . Because the monthly Customer Service Charges
3 are subject to the Residential Rate Modernization Plan
4 approved in Order No . 35802, Case No . PAC-E-22-15, no
5 additional changes are proposed in the Settlement . The
6 residential monthly service charge will increase on June
7 1 each year of the plan with commensurate decreases in
8 Energy Charges .
9 Additional Settlement Terms
10 Q. Will you please describe the provisions
11 contained in the Settlement for the Rock Creek II wind
12 project?
13 A. The Settlement provides a deferral for the
14 revenue requirement of the 400 MW Rock Creek II wind
15 project expected to be completed in September 2025 . In
16 lieu of filing a general rate case in 2025, the Parties
17 agree to allow the Company to defer into a regulatory
18 asset for later recovery the depreciation expense and
19 return on the project . The Rock Creek II project will
20 create production tax credits ("PTC") that will flow
21 through the SCAM to benefit customers . However, the
22 Company will track the PTCs associated with the project
23 so they can offset any potential disallowance on recovery
24 of the deferral in a future general rate case .
25 Q. Are there any other provisions in the
CASE NO. PAC-E-24-04 70 ENGLISH, D. (Stip) 13
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1 Settlement you would like to discuss?
2 A. While the Settlement contains many provisions
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CASE NO. PAC-E-24-04 71 ENGLISH, D. (Stip) 13a
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I that I did not discuss in detail, the Parties worked
2 collaboratively to pave a way forward on several
3 outstanding issues, including modifications to the SCAM,
4 the Company' s current hedging practices, and the
5 treatment of transmission level voltage line extensions .
6 The Company proposed to modify the ECAM sharing
7 band in its Application. While the Settlement maintains
8 the current 90/10 percent sharing band, the Parties agree
9 to host workshops to evaluate and explore alternative
10 risk sharing and incentive mechanisms .
11 The Company will also hold workshops with Staff
12 and other interested parties on the Company' s risk
13 management and hedging practices prior to the Company' s
14 next general rate case . Additionally, the Company will
15 perform a study on the costs and revenues associated with
16 transmission level voltage line extensions serving large
17 individual customers . Staff is concerned that
18 transmission level voltage lines used to serve individual
19 customers or pockets of customers are system-allocated
20 when those line function as distribution lines . The
21 proposed study will help inform Staff positions in future
22 rate cases .
23 Q. Do you have any other comments on the proposed
24 Settlement?
25 A. Yes . Staff has reviewed Attachments A and B
CASE NO. PAC-E-24-04 72 ENGLISH, D. (Stip) 14
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1 to the Settlement and verified they are consistent with
2 the
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CASE NO. PAC-E-24-04 73 ENGLISH, D. (Stip) 14a
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1 agreement . The agreed upon rate design will offer the
2 Company a reasonable opportunity to recover the proposed
3 revenue requirement . As implied throughout this
4 testimony, the Settlement represents a fair, just, and
5 reasonable compromise of the positions put forth by all
6 Parties and is in the public interest. Therefore, Staff
7 recommends the Commission approve the Settlement without
8 material changes or modifications .
9 Q. Does this conclude your testimony?
10 A. Yes, it does .
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CASE NO. PAC-E-24-04 74 ENGLISH, D. (Stip) 15
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I (The following proceedings were had in
2 open hearing. )
3
4 COMMISSIONER LODGE : Questions,
5 Mr. Dallas?
6 MR. DALLAS : No questions .
7 COMMISSIONER LODGE : Great, thank you.
8 Mr. Olsen?
9 MR. OLSEN: No questions .
10 COMMISSIONER LODGE : Mr. Williams?
11 MR. WILLIAMS : No questions .
12 COMMISSIONER LODGE : Are there questions
13 from the Commission?
14 Okay, seeing as there ' s no questions,
15 Mr. English, we appreciate you and your time . You' re
16 excused.
17 (The witness left the stand. )
18 COMMISSIONER LODGE : I want to make sure,
19 I believe this exhausts the witness list .
20 Yes, Mr. Triplett .
21 MR. TRIPLETT : No other witnesses from
22 Staff.
23 COMMISSIONER LODGE : Okay. Are there any
24 witnesses that I have missed for today' s proceedings?
25 Are there any further issues or items that
CSB REPORTING 75 ENGLISH
208 . 890 . 5198

1 need to come before the Commission today?
2 Posthearing briefings or closing
3 statements?
4 If I have overlooked the admission of any
5 additional exhibits previously identified in this matter,
6 they are now hereby admitted.
7 (All exhibits previously marked for
8 identification were admitted into evidence . )
9 COMMISSIONER LODGE : Intervenor funding
10 requests Rule 164 allows 14 days to apply for intervenor
11 funding. Does anyone anticipate needing intervenor
12 funding?
13 MR. OLSEN: Yeah, Irrigators will file a
14 petition for intervenor funding.
15 COMMISSIONER LODGE : Thank you, sir.
16 Anyone else?
17 I appreciate everyone ' s attendance and
18 courteous conduct here today. We really appreciate it.
19 The Commission will consider this record fully developed.
20 We will deliberate privately and render a decision as
21 soon as possible .
22 With that, we are adjourned. Thank you
23 very much.
24 (The Hearing adjourned at 10 : 14 a.m. )
25
CSB REPORTING 76 COLLOQUY
208 . 890 . 5198

1 A U T H E N T I C A T I O N
2
3
4 This is to certify that the foregoing
5 proceedings held in the matter of Rocky Mountain Power' s
6 application for authority to increase its rates and
7 charges in the State of Idaho, commencing at 10 : 00 a.m. ,
8 on Thursday, January 9, 2025, at the Commission Hearing
9 Room, 11331 West Chinden Blvd. , Building 8, Suite 201-A,
10 Boise, Idaho, is a true and correct transcript of said
11 proceedings and the original thereof for the file of the
12 Commission.
13 Accuracy of all prefiled testimony as
14 originally submitted to the Reporter and incorporated
15 herein at the direction of the Commission is the sole
16 responsibility of the submitting parties .
17
18
19
20
CONSTANCE S . BUCY
21 Certified Shorthand Reporter #187
22
23
24
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CSB REPORTING 77 AUTHENTICATION
208 . 890 . 5198