20250123Staff Comments .pdf

RECEIVED
Thursday, January 23, 2025 9:30:32 AM
IDAHO PUBLIC
UTILITIES COMMISSION
MICHAEL DUVAL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 11714
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 IDAHO POWER )
COMPANY'S FILING IN COMPLIANCE ) CASE NO. IPC-E-24-38
WITH ORDER NO. 36402 FOR AUTHORITY )
TO TRACK ANNUAL WHEELING )
REVENUES IN THE POWER COST ) COMMENTS OF THE
ADJUSTMENT ) COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Michael Duval, Deputy Attorney
General, submits the following comments.
BACKGROUND
On October 7, 2024, Idaho Power Company ("Company") applied for authority to track
transmission wheeling revenues in its Power Cost Adjustment("PCA") in compliance with the
settlement approved by Order No. 36042 issued in the Company's 2023 general rate case
("Application"). The Company proposed that tracking begin on April 1, 2024, to align with the
PCA year. Additionally, the Company requested that the Commission affirm that its Application
complies with Commission Order Nos. 32821 and 36042.
STAFF COMMENTS 1 JANUARY 23, 2025

STAFF ANALYSIS
Staff reviewed the directives contained in Order Nos. 32821 and 36042 and analyzed
whether the Company's proposed mechanism trues up actual wheeling revenues relative to those
embedded in base rates, as well as other potential risks. Staff believes that the proposal complies
with Order Nos. 32821 and 36042 by truing up wheeling revenues; however, Staff believes it
could potentially cause financial harm to the Company in the event of a significant change to the
Company's transmission system. Therefore, Staff recommends that the Commission (1)
acknowledge that the Company's proposal has complied with Order Nos. 32821 and 36042, and
(2) authorize the Company to track wheeling revenues in the PCA, starting April 1, 2024, while
monitoring the implementation of the proposed mechanism to determine whether it needs to be
modified in a timely manner.
Order Nos. 32821 and 36042
Order No. 32821 required that both the wheeling revenues from transmission customers
and third-party transmission expenses' should be included in future PCA, opposed to third-party
transmission expenses alone. See Order No. 32821 at 14. Subsequently, Order No. 36042
approved a settlement stipulation where parties agreed to a baseline of$46,361,643 of wheeling
revenues for tracking in the PCA.
The Company proposed a tracking mechanism that would calculate the difference
between actual wheeling revenues and a sales-adjusted baseline of wheeling revenues. The sale-
adjusted baseline will be calculated by multiplying the dollar per megawatt-hour("MWh")rate
of wheeling revenues embedded in base rates by actual Idaho jurisdictional sales. Based on the
approved wheeling revenues and test year sales in the 2023 General Rate Case (Case No. IPC-E-
23-11), a base level rate of$3.11 per MWh ($46,361,643/14,907,835 MWh=$3.11/MWh)will
be multiplied by the actual Idaho jurisdictional sales to calculate the sales-adjusted baseline of
wheeling revenues.
The proposed mechanism allows the wheeling revenues from transmission customers to
be tracked in the PCA and reflects the Commission-approved baseline of$46,361,643 in the
' Third-party transmission expenses are the expenses the Company pays the third parities for their transmission
services to allow the Company's purchases from or sales into the market. They are not the transmission costs
associated with the transmission services provided by the Company.
STAFF COMMENTS 2 JANUARY 23, 2025

2023 General Rate Case. Therefore, Staff believes the proposed mechanism complies with
Order Nos. 32821 and 36042.
Potential Risks
Conceptually, the Company's transmission costs are paid by different users who use the
transmission services including transmission customers and ratepayers, with each group paying
for its respective share. To achieve this, ratepayers pay for all the transmission costs, offset by
the expected wheeling revenues from transmission customers (both the costs and revenues are
determined in the general rate case typically using a 12-month test year). Neither transmission
costs nor wheeling revenues are trued-up to their actual amounts on an annual basis. In other
words, the Company will accept the difference (positive or negative)when actual transmission
costs deviate from those determined in the general rate case. At the same time, the Company
will accept the difference (positive or negative) when actual wheeling revenues collected
through Open Access Transmission Tariff("OATT") rates deviate from those established in the
general rate case.2 The proposed mechanism will allow the OATT revenue to be trued-up to the
actual amount of OATT revenue in the PCA, while still keeping transmission costs at the amount
set in a general rate case until an update occurs in a future general rate case.
The proposed mechanism involves two distinct ratemaking processes. For revenue, the
OATT rates are updated annually based on a prescribed formula using actual financial data from
the prior year-end through a Federal Energy Regulatory Commission("FERC")ratemaking
process. For costs, the retail rates that reflect the total transmission costs are set based on data
from a 12-month test year of a general rate case that does not occur on a prescribed time through
a state ratemaking process. See Table No. 1.
Table No. 1: Comparison of Revenue Side and Cost Side
Revenue Side Cost Side
Jurisdiction of Ratemaking FERC State
Rate Update Annually Uncertain(Until Next GRC)
Data Source Data from Prior Year-End Data from a 12-Month Test Year
2 OATT rates are established through an annual formula rate process at the Federal Energy Regulatory Commission.
STAFF COMMENTS 3 JANUARY 23, 2025

Due to the timing difference between the two ratemaking processes, there can be a
misalignment between the wheeling revenues ratepayers receive from transmission customers
and the costs ratepayers pay through base rates. It can be significant when there are changes to
the Company's transmission system, like large transmission projects being energized. Such
misalignments could impact the Company negatively.
For example, when a large transmission investment occurs but a general rate case is not
filed in time to reflect the change, the total transmission costs could be under-collected from
ratepayers, while the wheeling revenues that return to ratepayers could already reflect the new
transmission investment. In this scenario, the Company could be financially harmed due to the
timing difference between the ratemaking processes. Therefore, Staff believes that the Company
should monitor the implementation of the proposed mechanism to avoid potential harm.
STAFF RECOMMENDATION
Staff recommends that the Commission (1) acknowledge that the Company's proposal is
congruent with the requirements of Order Nos. 32821 and 36042, and (2) authorize the Company
to track wheeling revenues in the PCA, starting April 1, 2024, while monitoring the
implementation of the proposed mechanism to determine whether it needs to be modified in a
timely manner.
Respectfully submitted this 23rd day of January 2025.
IDayn H die for Michael Duval
Deputy Attorney General
Technical Staff. Yao Yin
James Chandler
I:\Utility\UMISC\COMMENTS\IPC-E-24-38 Comments.docx
STAFF COMMENTS 4 JANUARY 23, 2025

CERTIFICATE OF SERVICE
n1f6
I HEREBY CERTIFY THAT I HAVE THIS O✓ DAY OF JANUARY 2025,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF , IN CASE
NO. IPC-E-24-38, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
MEGAN GOICOECHEA ALLEN MATTHEW T. LARKIN
LISA D NORDSTROM TIMOTHY E TATUM
IDAHO POWER COMPANY JESSI BRADY
PO BOX 70 IDAHO POWER COMPANY
BOISE ID 83707-0070 PO BOX 70
E-MAIL: BOISE ID 83707-0070
mgoicoecheaallengidahopower.com E-MAIL: mlarkingidahopower.com
lnordstromgidahopower.com ttatumgidahopower.com
docketsgidahopower.com jbradygidahopower.com
PAT ICIA JORDAN SECRETARY
CERTIFICATE OF SERVICE