20250204Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: YAO YIN,UTILITIES ANALYST II
ADAM TRIPLETT,DEPUTY ATTORNEY GENERAL
DATE: FEBRUARY 4, 2025
RE: IN THE MATTER OF THE ANNUAL COMPLIANCE FILING TO
UPDATE THE LOAD AND GAS FORECASTS IN THE INCREMENTAL
COST INTEGRATED RESOURCE PLAN AVOIDED COST MODEL;
CASE NO. IPC-E-24-40.
BACKGROUND
On December 30, 2024, the Idaho Public Utilities Commission ("Commission") issued
Order No. 36434,which required Idaho Power Company("Company")to file a three-year natural
gas forecast update based on the latest New York Mercantile Exchange ("NYMEX") forward
prices to be used for determining avoided cost rates under the Incremental Cost Integrated
Resource Plan("ICIRP") methodology, with an effective date of January 1, 2025.
On January 17, 2025, the Company filed a Revised Natural Gas Price Forecast to comply
with Order No. 36434. Because a three-year forecast may not be long enough for pricing purposes,
the Company in the filing provided a 20-year forecast using the method specified in Order No.
35344.
On January 22,2025,the Company filed a Corrected Version of Revised Natural Gas Price
Forecast("Corrected Version") to correct a typo.
STAFF REVIEW
Staff reviewed the Company's updated natural gas forecast contained in the Corrected
Version and believes the forecast is reasonable. Therefore,Staff recommends that the Commission
DECISION MEMORANDUM - 1 - FEBRUARY 4, 2025

approve the updated natural gas forecast in the Corrected Version to be used for determining
avoided cost rates under the ICIRP methodology, with an effective date of January 1, 2025.
Order No. 36434 and Order No. 35344
Order No. 36434 required the Company to use the latest NYMEX forward prices to develop
a three-year forecast. Although the contract term for ICIRP-based projects is only two years, a
longer forecast may be needed to accommodate qualifying facilities ("QFs") with different
Commercial Operation Dates. In addition, if the latest NYMEX forward prices after October 15
are available, the use of those prices may not be appropriate, because "this case is intended to
annually update load and gas forecasts as of October 15 of each year." Order No. 35294 at 10.
To address these two issues, the Company used the latest NYMEX forward prices as of
October 15, 2024, and adopted the method specified in Order No. 35344 to develop a 20-year
natural gas forecast. See Table No. 1 below.
Table No. 1: 20-Year Natural Gas Forecast
Time Periods Methods
First 3 Years NYMEX Forwards Prices as of October 15
41h Year Average of NYMEX Forwards Prices as of October 15 and original
Platts Forecast contained in October 15 Filing
Remaining Years Original Platts Forecast contained in October 15 Filing
Staff Analysis
Staff believes that the updated natural gas forecast in the Corrected Version is reasonable
for four reasons. First, it provides a 20-year forecast to accommodate QFs with different
Commercial Operation Dates. Second,it resolved the issue of the unreasonable near-term forecast.
Third,the method used complies with Order No. 35344. Lastly,the latest NYMEX forward prices
are the most recent forecast as of October 15, which complies with both Order No. 35294 and
36434. Therefore, Staff recommends that the Commission approve the updated natural gas
forecast contained in the Corrected Version.
DECISION MEMORANDUM - 2 - FEBRUARY 4, 2025

STAFF RECOMMENDATION
Staff recommends that the Commission approve the updated natural gas forecast contained
in the Corrected Version of Revised Natural Gas Price Forecast filed on January 22, 2025.
COMMISSION DECISION
Does the Commission wish to approve the updated natural gas forecast contained in the
Corrected Version of Revised Natural Gas Price Forecast filed on January 22, 2025?
-J?-- v-4
Yao Yin
Utilities Analyst H
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DECISION MEMORANDUM - 3 - FEBRUARY 4, 2025