20250313Application.pdf

"4%611-w@IQAW POWER.
DONOVAN WALKER RECEIVED
March 13,2025
Lead Counsel
IDAHO PUBLIC
dwalker(cDidahopower.com UTILITIES COMMISSION
March 13, 2025
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-25-10
Idaho Power Company's Application for Approval of a Power Purchase
Agreement and an Energy Storage Agreement with Crimson Orchard Solar
LLC
Dear Commission Secretary:
Attached for electronic filing is Idaho Power Company's ("Idaho Power")
Application and the Direct Testimonies of Eric Hackett and Jared Ellsworth in the above
matter. A Word version of the testimonies will be sent in a separate email for the Reporter.
Also attached is a Protective Agreement. Due to the voluminous nature of
confidential and non-confidential information provided, the Company is posting the
documents to the secure FTP site to allow parties to view the requested information
remotely. Because certain attachments contain confidential information, the FTP site is
divided between confidential and non-confidential information. The login information for
the non-confidential portion of the FTP site will be provided to all parties, while the login
information for the confidential portion will only be provided to those parties who have
executed the Protective Agreement in this matter.
If you have any questions about any of the aforementioned documents, please do
not hesitate to contact me.
Very truly yours,
Donovan E. Walker
DEW:sg
Enclosures
1221 W. Idaho St(83702)
P.O. Box 70
Boise, ID 83707

CERTIFICATE OF ATTORNEY
ASSERTION THAT INFORMATION CONTAINED IN AN IDAHO PUBLIC UTILITIES
COMMISSION FILING IS PROTECTED FROM PUBLIC INSPECTION
In the Matter of Idaho Power Company's Application for Approval of a Power
Purchase Agreement and an Energy Storage Agreement with Crimson Orchard
Solar LLC
Case No. IPC-E-25-10
The undersigned attorney, in accordance with Commission Rules of Procedure
67, believes that Exhibit Nos. 2, 3, 4, and 5 to the Direct Testimony of Eric Hackett,
dated March 13, 2025, contains information that Idaho Power and/or a third-party claim
constitutes trade secrets or other confidential business records, and/or other non-public
records exempt from disclosure under state or federal law including but not limited to
Idaho Code § 48-801, et seq.; Idaho Code § 74-101, et seq.; and/or U.S. Code of
Federal Regulations Title 17." As such, it is protected from public disclosure, inspection,
examination, or copying.
DATED this 13th day of March 2025.
Donovan E. Walker
Attorney for Idaho Power Company

DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker(o-)idahopower.com
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S APPLICATION FOR ) CASE NO. IPC-E-25-10
APPROVAL OF A POWER PURCHASE )
AGREEMENT AND AN ENERGY STORAGE ) APPLICATION
AGREEMENT WITH CRIMSON ORCHARD )
SOLAR LLC. )
Idaho Power Company ("Idaho Power" or "Company"), in accordance with Idaho
Code §§ 61-501, 61-502, and 61-503 as well as RP 52 and 201 hereby respectfully makes
application to the Idaho Public Utilities Commission ("Commission") for an order: (1)
approving the 20-year Power Purchase Agreement ("PPA") between Crimson Orchard
Solar LLC and Idaho Power Company supplying the 100 megawatts ("MW") output to the
Company ("Crimson Orchard PPA"), (2) approving the 20-year Energy Storage
Agreement ("ESA") between Crimson Orchard Solar LLC and Idaho Power for 100 MW
of dispatchable energy storage capacity ("Crimson Orchard ESA"), and (3)
APPLICATION - 1

acknowledging the lease accounting necessary to facilitate the transaction and that the
resulting expenses associated with both the PPA and the ESA are prudently incurred for
ratemaking purposes. Approval of this request is necessary to position the Company to
meet its obligation to provide safe, reliable service to its customers.
Accompanying this Application are two sets of testimony. The Direct Testimony of
Jared L. Ellsworth presents the Company's need for new resources to meet an identified
capacity deficit in 2027 as informed by the 2021 Integrated Resource Plan ("IRP"), again
in the 2023 IRP, and subsequently further enhanced through system reliability
evaluations, which led to the solicitation through a Request for Proposals ("RFP") seeking
to acquire energy and capacity necessary to address the identified near-term capacity
needs. Mr. Ellsworth then describes the most recent assessment of system reliability and
its impact to the capacity deficit, supporting the acquisition of resources to address the
identified near-term capacity needs. The Direct Testimony of Eric Hackett provides an
overview of the procurement process undertaken to meet Idaho Power's identified
capacity deficiency in 2027, and the resulting fair and competitive RFP process that was
fully compliant with the required resource procurement rules, leading to the selection of
least-cost, least-risk resources necessary to meet the Company's electric energy needs
in 2027, including the Crimson Orchard PPA and Crimson Orchard ESA for which Idaho
Power is requesting approval of in this proceeding.
L BACKGROUND
1. The annual capacity positions identified in the 2021 IRP were deficits of
approximately 101 MW in 2023, 186 MW in 2024, 311 MW in 2025, 560 MW in 2026 and
665 MW in 2027. As described more completely in the Direct Testimony of Mr. Ellsworth,
APPLICATION - 2

the Company recognizes that during the near-term resource decision-making phase, the
annual capacity positions can be very fluid and therefore regularly performs system
reliability assessments. Idaho Power constantly monitors resource needs, and in the face
of growing loads and deficits has responded with added and appropriate urgency to
acquire additional low-cost, reliable sources of generation and capacity, as evidenced by
the Company's consecutive requests to acquire resources to be online in 2023,' 2024,2
2025,3 2026,4 and 2027.5 Idaho Power expects to acquire additional resources each year
thereafter through (at least) 2028. See, OPUC Case No. UM 2317, In the Matter of Idaho
Power Company's Application for Approval of 2028 All-Source Request for Proposals to
Meet 2028 Capacity Resource Need.
2. Under Idaho law, Idaho Power has an obligation to provide adequate,
efficient, just, and reasonable service on a nondiscriminatory basis to all those that
request it within its service area. Idaho Power has experienced and expects sustained
load growth, thereby requiring the addition of new resources. To meet its obligation to
reliably serve customer load and fill capacity deficiencies identified in 2026 and 2027, the
Company conducted a competitive solicitation through the issuance of an All-Source RFP
seeking to acquire a combination of energy and capacity resources. Idaho Power did not
define the type of resource (i.e., wind, solar, gas, or battery storage) desired; however,
the Company outlined that the deficit could require as much as 1,100 megawatts (WW")
of variable energy resources and a minimum of 350 MW of peak capacity to help meet
Case Nos. IPC-E-22-06 and IPC-E-22-13.
2 Case Nos. IPC-E-23-05 and IPC-E-23-20.
3 Case Nos. IPC-E-22-29 and IPC-E-23-20.
4Case Nos. IPC-E-24-01, IPC-E-24-16 and IPC-E-24-45.
s Case Nos. IPC-E-24-42 and IPC-E-24-46.
APPLICATION - 3

Idaho Power's previously identified capacity needs in 2026 and 2027 ('2026 RFP"). The
procurement process resulted in the identification of least-cost, least-risk resources
necessary to fill the most recently identified 2027 capacity deficiency of 123 MW. The
proposed acquisitions, as described herein, are necessary and required in order to
continue to provide reliable and adequate electric service to Idaho Power's customers
starting in the summer of 2027 and into the future.
II. OREGON PROCUREMENT RULES
3. The Commission, in Case No. IPC-E-10-03, initiated a case seeking to
establish competitive bidding guidelines for the RFP process. In 2013, the Commission
closed Case No. IPC-E-10-03 without establishing Idaho-specific resource procurement
guidelines, but rather directing Idaho Power to follow the RFP guidelines applicable to its
Oregon service territory. The Oregon RFP guidelines to which the Commission referred
were later codified into the administrative rules of the Public Utility Commission of Oregon
("OPUC") resource procurement rules. The OPUC resource procurement rules impose
competitive bidding requirements upon an electric utility for the "acquisition of a resource
or a contract for more than an aggregate of 80 MWs and five years in length," among
other requirements. Idaho Power initiated the rule compliant RFP process on September
15, 2022, to acquire resources to be online in 2026 and 2027, ultimately receiving
approval of the final shortlist of prospective projects to meet the 2026 and 2027 deficits.
The OPUC found that Idaho Power conducted a fair and competitive resource acquisition
procurement process in accordance with the OPUC competitive bidding rules. OPUC
Order No. 24-055, Docket UM 2255, Feb. 22, 2024.
APPLICATION -4

III. RESOURCE PROCUREMENT PROCESS
4. On September 15, 2022, Idaho Power commenced the competitive bidding
process, filing a request with the OPUC to (1) open a docket for approval of the 2026
RFP, (2) appoint an Independent Evaluator ("IF) to oversee the RFP process, and (3)
approve the proposed 2026 RFP scoring and modeling. On December 27, 2022, the
OPUC approved the selection of London Economics International, LLC ("LEI") as the IE
for Idaho Power's 2026 RFP and evaluation of 2026 RFP resources. The OPUC also
approved the concurrent discussion of both scoring and modeling methodologies and
preparation of the draft 2026 RFP.
5. The Company worked with OPUC Staff and stakeholders to finalize the draft
2026 RFP and on June 8, 2023, Idaho Power formally issued the 2026 RFP, soliciting
bids for (1) energy market purchases and (2) new or existing resources. The 2026 RFP
was well received with 192 bids from 31 different bidders across 47 resources sites,
summing to more than 15 gigawatts of resources. Approximately 40 percent of the bids
reflected a commercial operation date by June 1, 2026, the remaining 60 percent of the
bids reflected a projected commercial operation date after June 1, 2026. The bids
included a variety of ownership structures, including many bids that would result in bidder-
owned resources (i.e., PPA's, and Battery Storage Agreements), as well as three
benchmark bids across three sites, submitted by Idaho Power's Power Supply
department.
6. The direct testimony of Mr. Hackett details the bid evaluation process which
was consistent and prescriptive as described in the 2026 RFP, ultimately identifying the
final shortlist of projects which are presented in Confidential Exhibit No. 2. As required
APPLICATION - 5

under the OPUC competitive bidding rules, the OPUC approved Idaho Power's final
shortlist on February 22, 2024. Once the most cost-effective projects were identified, the
Company began negotiations with developers for procurement of the resources
necessary to meet Idaho Power's 2027 capacity deficit.
IV. RESOURCE DESCRIPTIONS
7. The bid evaluation process of the project proposals submitted through the
2026 RFP is designed to identify the combination and size of the proposed resources that
will maximize customer benefits while ensuring Idaho Power meets its energy and
capacity needs. Upon conclusion of the approximately 15-month mandated competitive
bidding rule-compliant process, the Company began negotiations with developers for
procurement of the resources necessary to meet the identified 2027 capacity deficit. On
February 7, 2025, Idaho Power executed agreements associated with one of the
remaining cost-effective projects that was able to meet the June 1, 2027, commercial
operation date, the Crimson Orchard project, consisting of the standalone Crimson
Orchard PPA and the standalone Crimson Orchard ESA. The project includes (1) a 100
MW solar PV facility that supplies energy to either the battery storage facility or the
Company's system, and (2) the battery storage facility, supplying 100 MW of capacity to
Idaho Power, (collectively the "Crimson Orchard Project"). The total output of the Crimson
Orchard Project is 100 MW.
Crimson Orchard PPA
8. The Crimson Orchard PPA is 20-year PPA between Idaho Power and
Crimson Orchard Solar, LLC, who, under the terms of the PPA, will construct, own,
operate and maintain a solar powered generation facility located in Elmore County, Idaho,
APPLICATION - 6

with an expected nameplate capacity of 100 MW, supplying the output to the Company
for the period of 20 years from a commercial operation date of June 1, 2027. An executed
copy of the PPA is attached as Confidential Exhibit No. 4 to Mr. Hackett's Direct
Testimony. The PPA contains levelized, fixed pricing for the 20-year term and provides
that it will not become effective unless the Commission approves all of the PPA's terms
and provisions and declares that all payments the Company makes for purchases of
energy will be allowed as prudently incurred expenses for ratemaking purposes. Exhibit
5 to the PPA sets forth the Contract Price for Contract Years 1 through 20 on a dollars
per megawatt-hour ('MWh") basis. The PPA is similar in many ways to the numerous
energy sales agreements approved by the Commission pursuant to the Company's
obligations under the Public Utility Regulatory Policies Act of 1978 ("PURPA"), but also
contains additional other terms and conditions consistent with industry standard, non-
PURPA power purchase agreements including pricing, security, and other terms of
service.
Crimson Orchard ESA
9. Concurrent with execution of the Crimson Orchard PPA, Idaho Power
executed the 20-year Crimson Orchard ESA for a battery energy storage system located
in Elmore County, Idaho, supplying 100 MW of capacity at the point of interconnection on
Idaho Power's system, with a commercial operation date of June 1, 2027. An executed
copy of the ESA is attached as Confidential Exhibit No. 5 to Mr. Hackett's Direct
Testimony. The ESA is similar to the agreement with Kuna BESS, LLC, approved by the
Commission in Case No. IPC-E-25-20 with Order Nos. 36011 and 36016, providing 150
MW of dispatchable energy storage capacity. The ESA acts as a type of lease through
APPLICATION - 7

which Crimson Orchard Solar, LLC will develop, design, construct, own, and operate the
battery storage system and, in accordance with the terms of the agreement, Idaho Power
has the exclusive right to dispatch and use the charging and discharging energy in
exchange for a monthly payment.
10. The ESA contains fixed, monthly capacity pricing, with no annual escalation,
throughout the term of the agreement. The Contract Price is set forth in Article I of the
ESA. Section 3.1 provides that the ESA only becomes effective upon Commission
approval of all of the terms and provisions of the ESA as well as the accounting and
regulatory treatment requested by the Company, and declaration that all payments the
Company makes to Seller for purchases of energy will be allowed as prudently incurred
expenses for ratemaking purposes. The terms of the ESA, including pricing, security, and
other terms of service, are generally consistent with industry standard terms included in
other Commission-approved procurements and energy sales agreements.
V. ACCOUNTING TREATMENT OF THE CRIMSON ORCHARD ESA
11. Although similar to a PPA, the ESA differs such that the Company controls
the dispatch of capacity of the battery storage facility. As such, under Generally Accepted
Accounting Principles ("GAAP"), any contract that provides the right to control an
identified asset over a period of time is considered a capital lease. The Company must
record the fixed costs associated with the ESA as a lease liability, with a corresponding
right-of-use asset, upon energization. Following establishment of the lease liability and
right-of-use asset, the right-of-use asset is amortized on a straight-line basis over the 20-
year contract term, resulting in the recording of amortization expense and a
corresponding entry to accumulated amortization. Also, interest expense, calculated by
APPLICATION - 8

applying the incremental borrowing rate to the remaining lease liability, is recorded. The
difference between the payment made to Crimson Orchard Solar, LLC, and the interest
expense, is the principal applied to the lease liability, reducing the outstanding lease
liability each month. Both the amortization and interest expense associated with the lease
liability are comparable to the depreciation on, and return of, a traditional capital
investment, respectively. Idaho Power is requesting the Commission acknowledge the
lease accounting is necessary to facilitate the transaction and that the expenses
associated with the ESA are prudently incurred expenses for ratemaking treatment.
VI. COMMUNICATIONS AND SERVICE OF PLEADINGS
12. Communications and service of pleadings with reference to this Application
should be sent to the following:
Donovan E. Walker Tim Tatum
Lead Counsel Vice President, Regulatory Affairs
Idaho Power Company Idaho Power Company
1221 West Idaho Street (83702) 1221 West Idaho Street (83702)
P.O. Box 70 P.O. Box 70
Boise, Idaho 83707 Boise, Idaho 83707
dwalker(aD-idahopower.com ttatumCcDidahoipower.com
dockets(a)-idahopower.com
VII. MODIFIED PROCEDURE
13. The Company believes that a hearing is not necessary to consider the
issues presented herein, and respectfully requests that this Application be processed
under Modified Procedure; i.e., by written submissions rather than by hearing. RP 201,
et seq. If, however, the Commission determines that a technical hearing is required, the
Company stands ready to present its testimony and support the Application in such
hearing.
APPLICATION - 9

VIII. REQUEST FOR RELIEF
Idaho Power respectfully requests that the Commission issue an order (1)
approving the 20-year PPA between Crimson Orchard Solar LLC and the Company
supplying the 100 MW output to the Company, (2) approving the 20-year ESA between
Crimson Orchard Solar LLC and Idaho Power for 100 MW of dispatchable energy storage
capacity, and (3) acknowledging the lease accounting necessary to facilitate the
transaction and that the resulting expenses associated with both the PPA and the ESA
are prudently incurred for ratemaking purposes. With a total output of 100 MW, the
Crimson Orchard Project provides for a least-cost and least-risk resource necessary for
meeting the 2027 capacity deficiency.
DATED at Boise, Idaho this 13t" day of March 2025.
Wd% k—l"_
DONOVAN E. WALKER
Attorney for Idaho Power Company
APPLICATION - 10