20250320APPLICATION.pdf

HIQAHO POWERO
DONOVAN WALKER
Lead Counsel RECEIVED
dwalker(aD_idahopower.com March 20, 2025
IDAHO PUBLIC
UTILITIES COMMISSION
March 20, 2025
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-25-14
In the Matter of Idaho Power Company's Application for an Accounting Order
for the Incremental Distribution Undergrounding Costs of the New 138Kv
Transmission Line in the Wood River Valley
Dear Commission Secretary:
Attached for electronic filing is Idaho Power Company's Application in the above-
entitled matter. If you have any questions about the attached filing, please do not hesitate
to contact me.
Sincerely,
Donovan Walker
DEW:cd
Enclosures
1221 W. Idaho St(83702)
P.O. Box 70
Boise, ID 83707

DONOVAN E. WALKER (ISB No. 5921)
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalkerCcDidahopower.com
mgoicoecheaallenCa�_idahopower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S APPLICATION FOR AN ) CASE NO. IPC-E-25-14
ACCOUNTING ORDER FOR THE )
INCREMENTAL DISTRIBUTION ) APPLICATION
UNDERGROUNDING COSTS OF THE )
NEW 138 KV TRANSMISSION LINE IN )
THE WOOD RIVER VALLEY )
Idaho Power Company ("Idaho Power" or "Company"), pursuant to Idaho Code
§§ 61-502 and 503 and Idaho Public Utilities Commission's ("Commission") Rule of
Procedure 52, respectfully submits this Application requesting Commission authorization
to retain in Construction Work in Progress ("CWIP") the incremental distribution
undergrounding costs incurred for the Blaine County portion of the new 138 kV line in the
Wood River Valley until such time that the entire project is completed and placed into
service.
While the distribution undergrounding portion of the project will be physically
placed into service in late 2025, the Company seeks to delay placing the incremental
costs that will ultimately be subject to the surcharge collection into utility plant in service
APPLICATION - 1

for accounting purposes until the transmission segment is completed and operational,
which is currently estimated by the end of 2026, although construction schedules may
extend this timeframe. Upon full project completion, Idaho Power will file a compliance
update to implement Schedule 96 - Blaine County Underground Surcharge, incorporating
the incremental distribution and transmission costs attributable to Blaine County. No
surcharge implementation or rate adjustment is being requested in this filing. Concurrent
with this Application, the Company has filed a Notice of Withdrawal of the Compliance
Filing in Case No. IPC-E-24-22 consistent with the request made in this case.
In further support of this Application, Idaho Power represents as follows:
I. INTRODUCTION
1. Idaho Power's Wood River Valley Reliability Project ("WRV Project") is a
combined distribution and transmission project with a long and complex regulatory history
as more fully described below. After work began on the distribution line portion of the
WRV Project in the fall of 2023, the Company initiated Case No. IPC-24-22 in May of
2024' (the "2024 Case") that was intended to address certain compliance requirements
stemming from the Commission's previous order associated with the WRV Project.2
2. The 2024 Case included, among other items, an update to the Company's
proposed surcharge implementation approach to reflect changes in construction plans.
More specifically, though the Company originally anticipated that the transmission and
distribution components of the WRV Project would be energized simultaneously, the
In the Matter of Idaho Power Company's Compliance Filing to Update the Customer Surcharge to
Collect Incremental Costs of Distribution Undergrounding of the New 138 kV Transmission Line in the
Wood River Valley and Establish Necessary Regulatory Accounting Treatment, Case No. I PC-E-24-22.
2 In the Matter of Idaho Power Company's Petition for Approval of a Customer Surcharge and Modified
Line Route Configuration for Construction of a New 138 kV Transmission Line in the Wood River Valley,
Case No. IPC-E-21-25, Order No. 25452 (Jun. 28, 2022).
APPLICATION - 2

decision to underground the distribution lines along the project's route, along with other
construction considerations, necessitated a staggered schedule. As a result, distribution
construction was scheduled to occur first, followed by transmission construction. Based
on the staggered construction timeline, the Company proposed splitting the surcharge
implementation into two phases, first for the distribution portion with the transmission
portion occurring at a later date, and the 2024 Case sought to update WRV Project cost
information for the first phase of implementation to reflect the distribution-only portion of
the surcharge.
3. On November 1 , 2024, the Commission temporarily suspended the
procedural schedule in the 2024 Case at the Company's request due to unforeseen
circumstances preventing the full completion of the distribution line. In the meantime, the
Company has engaged in discussions with the Commission Staff regarding next steps,
and based on those discussions, have aligned on pursuing a procedural path that will
provide for a single surcharge to be implemented at the conclusion of the project versus
the two-phase implementation proposal in the 2024 Case. To that end, in this Application
the Company is requesting authorization to delay placing the incremental distribution
undergrounding cost of the WRV Project into utility plant in service for accounting
purposes and instead retain those amounts in CWIP until the transmission portion of the
project is completed. This will eliminate the need for a separate distribution surcharge
until the transmission portion is complete and placed in service, allowing for a single
surcharge. Because the 2024 Case was specifically associated with implementation of
the distribution-only portion of the surcharge, which is no longer the approach being
pursued, the Company is making a separate filing to withdraw that filing and close that
APPLICATION - 3

docket.
II. REGULATORY HISTORY
WRV Project and the 2017 CPCN
4. Idaho Power's WRV Project includes a combination of electric distribution,
transmission, and substation work, in which the Company will bury or rebuild existing
distribution lines as well as build a new overhead and underground transmission line
between the Wood River substation in Hailey and the Ketchum substation in northeastern
Ketchum. The new transmission line and related facilities will provide a redundant source
of energy into the northern portion of the Wood River Valley, including the communities
of Ketchum and Sun Valley and portions of Blaine County (collectively referred to as the
"North Valley").
5. The North Valley contains the resort communities of Ketchum and Sun
Valley, as well as the Sun Valley Ski Resort. Currently, the North Valley is served by the
Wood River and Ketchum substations, which are connected to the Company's
transmission system by a single-source, 12.4 mile, 138-kV radial line that was built in
1962 with wooden poles. If the line experiences sustained outages, the outages may be
lengthy because access to repair the line is impeded by residential development, rough
terrain, and aged construction roads in many areas. Further, the mountainous terrain
limits vehicle access, impedes equipment set-up, and contributes to avalanche threats.
Ultimately, the need to construct the WRV Project was to: (1) increase reliability to the
area by providing a redundant source of energy, and (2) reconstruct the existing and
aging 138-kV radial transmission line without long-term disruption of service to the North
Valley.
APPLICATION - 4

6. In 1995, the Company first undertook an extensive public involvement
process regarding the proposed construction of the WRV Project. At the conclusion of the
process, Idaho Power carefully evaluated the input received from the area's public
officials and citizens. The general response at that time was that, despite the unavoidable
risk of an outage to the existing transmission line, the proposed new transmission line
should not be built. The reasons for the public opposition included the difficulty of finding
an acceptable route for the transmission line, aesthetic impacts, perceived health and
safety concerns, and the requirement that local funding of incremental costs of placing
part or all the line underground would be required. The project was put on hold indefinitely
and Idaho Power's previous CPCN to construct the line was cancelled.3
7. Subsequently, in 2004, Idaho Power initiated several Community Advisory
Committees ("CAC") and undertook a comprehensive, cooperative transmission planning
exercise with the communities and leaders across its service territory. These committees
were created to provide a cooperative effort between the Company and the communities
it serves in developing an outline for prioritized improvements and additions to Idaho
Power's transmission and substation infrastructure. One of those, the Wood River CAC,
was convened in 2007 and developed the Wood River Valley Electrical Plan ("WREP"),
a comprehensive plan for future transmission facilities in the Wood River Valley.
8. The WREP included construction of the redundant 138-kV transmission line
between the Wood River and Ketchum substations. The WREP was updated in 2011 after
3 In the Matter of the Application of Idaho Power Company for an Amended Certificate of Public
Convenience and Necessity No. 272, Case No. IPC-E-95-06, Order No. 26107 and cancelled Certificate
No. 272 (Aug. 1995); Case No. U-1006-89, Order No. 11315 and Certificate No. 272 (Feb. 1974).
APPLICATION - 5

additional deliberations and extensive public outreach, and in 2012 the CAC reconvened
to provide additional input for planned open house events. In 2014, both the City of
Ketchum and the Ketchum Energy Advisory Committee were invited to join the CAC,
which reaffirmed the need for a second energy path into the North Valley.
9. While most of the parties generally agreed upon the purpose and need for
the redundant transmission line, the consensus opinion was that a feasible route could
only be obtained and permitted as long as at least a portion of the line was underground.
However, the parties were unable to reach agreement about the funding and payment of
any incremental cost difference between an overhead, or least-cost alternative, and an
underground, or higher-cost build.
10. In the absence of agreement, Idaho Power proposed the following
alternative line route and facilities: 138-kV overhead transmission from the Wood River
substation, north along Highway 75, to an underground transmission transition point near
Elkhorn Road, and then underground to the Ketchum substation. These proposed
facilities would follow the same path as the existing distribution lines, replacing them and
minimizing the aesthetic impact. The route was economically equivalent to the Company's
standard construction configuration and therefore would not require any additional
incremental cost recovery from the local jurisdictions.
11. On November 8, 2016, the Company brought the proposed line route to the
Commission in Case No. IPC-E-16-28, requesting the Commission find that the new 138-
kV transmission line and related facilities to provide redundant service from the Wood
River substation into the Ketchum substation was needed, and further requesting the
Commission grant a CPCN for construction of the line as proposed and agreed upon by
APPLICATION - 6

the local jurisdictions. The Commission issued Order No. 33872 on September 15, 2017,
granting Idaho Power's request for a CPCN for a second 138-kV line, approving the
requested route of overhead transmission from the Wood River substation to the
transition point near Elkhorn Road, then underground transmission to the Ketchum
substation. After the Commission's decision, this authorized route became known as the
2017 CPCN Route—the baseline to which the cost of Owl Rock Road Route is compared
to determine the incremental surcharge total, as described in detail below.
Blaine County Commission Conditional Use Permit
12. Prior to the CPCN proceeding described above, Idaho Power submitted an
application to the Blaine County Board of Commissioners ("County Board") for a
Conditional Use Permit ("CUP"), which was ultimately denied. The Company then filed a
new CUP application in November 2017 with the County Board to seek out a mutually
acceptable route configuration that was consistent with the CPCN route and acceptable
to Blaine County, with the opportunity to mutually agree to certain micro-siting of facilities,
and for the County Board to request additional undergrounding should it identify a method
to fund the additional incremental cost of such undergrounding.
13. Following filing of the new CUP application, Idaho Power worked with the
Blaine County Planning and Zoning ("P&Z") Commission, with engagement from the
County Board, and lengthy public hearing processes, conducting extensive analysis of
the micro-siting options identified by the P&Z Commission. The CUP application was
approved on January 15, 2019, though no specific route for the line was approved.
14. Several parties appealed the decision of the P&Z Commission approving
the CUP to the County Board, which ultimately issued a decision modifying the CUP
APPLICATION - 7

approved the P&Z Commission by requiring Idaho Power to bury the transmission line.4
However, recognizing it could be difficult to secure the required funding to bury the entire
transmission line, the decision left open the possible consideration of "an overhead
transmission line in this area.'5
15. Funding to underground substantial portions of the line proved difficult,
although the County Board explored a variety of options, including passing a bond or
government grants. The County Board, with consultation from the P&Z Commission,
prioritized portions of the line and facilities for undergrounding. To cover the cost of the
incremental undergrounding, the County Board asked Idaho Power to develop a
surcharge mechanism that would be placed on Blaine County customers' electric bills.
Owl Rock Road Route and Development of the Surcharge
16. The new line configuration, the Owl Rock Road Route, was agreed upon
by all parties involved in the P&Z and CAC efforts and included the burial of: (1) an
additional 1 .4 miles of transmission line, located to the south from Elkhorn Road to near
Owl Rock Road, and (2) the existing distribution line for approximately 8 miles along the
planned route along Buttercup Road to Highway 75.
17. The transmission line would include overhead construction from the Wood
River substation to the underground transition point at Owl Rock Road. Additionally,
rather than place the existing distribution lines as under-build on the new overhead
transmission structures, the existing distribution lines along the route would be buried.
This will both reduce the height of the transmission poles and reduce the number of lines
in the air as the transmission line will have three energized wires while the existing
4 County Board's June 2019 Decision on Appeal.
s Id
APPLICATION - 8

distribution line has between three and six energized wires and one neutral wire.
18. On December 22, 2020, Idaho Power filed an application to the County
Board for CUP approval of the Owl Rock Road Route funded by a surcharge mechanism
to be placed on Blaine County customers' electric bills. The County Board approved the
CUP for the Owl Rock Road Route on March 9, 2021.
19. Under this CUP, the County Board modified the "all underground" condition
for the WRV Project and replaced the language with a condition that the CUP was
contingent on partial undergrounding as decided on with the Owl Rock Road Route. This
final CUP from the County Board gave Idaho Power authority to move forward with an
application with the Commission for approval of a modified line route CPCN based on the
Owl Rock Road Route, as well as authority to develop a surcharge that would be used to
collect the incremental costs of undergrounding from Blaine County customers.
Amended CPCN and Surcharge Methodology
20. Following the County Board's issuance of the final CUP, Idaho Power filed
its petition for a modified line route and surcharge implementation in Case No. IPC-E-21-
25 ('2021 Case") on August 6, 2021. More specifically, Idaho Power requested, in
pertinent part, that the Commission: (1) approve the proposed surcharge for the
Company's customers in Blaine County to pay for additional undergrounding of the
previously approved WRV Project; (2) approve modifications to the line route that had
previously been approved in the CPCN granted to Idaho Power by the Commission in
Order No. 33872; and (3) grant an accounting order authorizing the Company to
depreciate the incremental capital costs associated with the incremental costs of the WRV
Project over the 20-year surcharge collection period.
APPLICATION - 9

21. On June 28, 2022, the Commission issued Order No. 35452, approving the
Company's petition as filed, which included authorizing the proposed surcharge and
methodology, approving the modified WRV Project line route ("Owl Rock Road Route"),
and granting an accounting order as requested by the Company.
22. In addition, the Commission ordered Idaho Power to provide the
Commission with the estimated cost of the Owl Rock Road Route upon receiving pre-
construction pricing for the WRV Project and, within six months of project completion, to
file a final determination of the incremental project cost along with any changes to the
surcharge. The Commission also detailed a number of customer communication
requirements, including directing the Company to: 1) work with Commission Staff("Staff')
to develop language for a bill insert on Blaine County customers' electric bills that explains
the surcharge and will be sent to customers before the surcharge becomes effective; 2)
include the surcharge as a line-item on Blaine County customers' electric bills; and 3) vet
the language of the surcharge line-item with Staff.
III. SURCHARGE UPDATE
23. As previously noted, in May 2024 the Company initiated the 2024 Case to
address updates to the customer surcharge as well as the customer communications
requirements prescribed by the Commission in Order No. 35452.6 With respect to the
customer surcharge,' the Company proposed a two-phase approach to surcharge
6 In the Matter of Idaho Power Company's Compliance Filing to Update the Customer Surcharge to
Collect Incremental Costs of Distribution Undergrounding of the New 138 kV Transmission Line in the
Wood River Valley and Establish Necessary Regulatory Accounting Treatment, Case No. IPC-E-24-22.
The customer surcharge covers the additional cost of undergrounding distribution and transmission lines
beyond the standard overhead construction. Attachment 3 in Case No. IPC-E-24-22 provides a detailed
cost breakdown comparing actual project costs to an estimated overhead alternative (including AFUDC)
to determine the distribution surcharge amount allocated to Blaine County customers.
APPLICATION - 10

collection to align with the staggered WRV Project construction schedule for the
transmission and distribution portions of the WRV Project, which would entail
implementing the distribution portion of the surcharge first followed by the surcharge for
the transmission portion of the line based on the actual in-service timing for those
portions.
24. Subsequently, the Company requested that the Commission suspend the
procedural schedule in the 2024 Case when it became clear that, due to circumstances
outside of the Company's control, the distribution portion of the line would not be fully
completed by the time initially anticipated by the Company. As a result, on November 1,
2024, the Commission stayed the case for up to six months from the issuance of the
Order or until the Company files a motion to initiate a new case schedule — whichever
comes first -- and further directed the Company to resume the case as soon as practical
once the distribution line is energized.$
25. On January 21 , 2025, the Company met with Commission Staff to discuss
the status of the Wood River Valley Project. During that meeting, Staff encouraged the
Company to consider alternatives to a two-phase approach to surcharge collection that
the Company proposed in the 2024.
26. To address Staff's request, the Company proposes a process supporting
the implementation of a single WRV Project surcharge once both the transmission and
distribution segments are operational and will make another compliance filing with the
Commission closer to transmission energization. In the meantime, to ensure alignment
with the single surcharge framework, the Company is filing this request for an accounting
I Interlocutory Order No. 36381
APPLICATION - 11

order allowing the incremental distribution portion of the WRV Project to remain in CWIP
until the remainder of the transmission project is completed and placed into service. This
proposed process and associated accounting order will provide for a single surcharge to
be implemented without the Company suffering unwarranted financial harm.
IV. WRV PROJECT STATUS
27. The underground distribution system is projected to be in service by
October 2025, approximately one year ahead of the transmission system, primarily due
to delays in boring under the Big Wood River and other construction-related challenges.
Currently, approximately 80 percent of the underground distribution infrastructure is
installed. However, energization is contingent upon the completion of the bore, scheduled
for this spring, with the remaining sections north of Gimlet Road anticipated to be
completed by fall 2025. Concurrently, the underground transmission duct bank is
approximately 50 percent complete between Owl Rock Road and the Ketchum
substation, with several sections still under construction. The transmission system,
including overhead components, is expected to be fully operational by the end of 2026.
However, coordination with Idaho Transportation Department Road widening activities
presents a potential risk of timeline extension.
V. ACCOUNTING ORDER AND TREATMENT
28. To facilitate a single surcharge, the Company respectfully requests an order
authorizing Idaho Power to delay placing the incremental distribution costs attributable to
Blaine County—recorded in CWIP (Federal Energy Regulatory Commission account
107000)—into service until the transmission line is complete and operational. Once the
transmission line construction is complete, both the incremental distribution and
APPLICATION - 12

transmission line costs attributable to Blaine Country would be placed in service and
depreciated over the applicable surcharge period, as previously approved in Order No.
35452.
VI. MODIFIED PROCEDURE
29. Idaho Power 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.
VII. COMMUNICATIONS AND SERVICE OF PLEADINGS
30. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be served on the following:
Donovan E. Walker Timothy Tatum
Megan Goicoechea Allen Matthew T. Larkin
IPC Dockets 1221 West Idaho Street (83702)
1221 West Idaho Street (83702) P.O. Box 70
P.O. Box 70 Boise, ID 83707
Boise, ID 83707 mlarkin idahopower.com
dwalker idahopower.com ttatum idahopower.com
mgoicoecheaallen(a-)_idahopower.com
dockets idaho power.com
VIII. CONCLUSION
31. For the reasons set forth above, Idaho Power Company respectfully
requests that the Commission issue an order authorizing Idaho Power to delay placing
the incremental distribution costs attributable to Blaine County into service for accounting
purposes until the transmission line is complete and operational.
APPLICATION - 13

DATED at Boise, Idaho, this 20t" day of March 2025.
J 1- ..'
Donovan E. Walker
Attorney for Idaho Power Company
APPLICATION - 14

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 20t" day of March, 2025 1 served a true and correct
copy of IDAHO POWER COMPANY'S APPLICATION upon the following named parties
by the method indicated below, and addressed to the following:
Commission Secretary Hand Delivered
Idaho Public Utilities Commission U.S. Mail
11331 W. Chinden Blvd., Bldg No. 8 Overnight Mail
Suite 201-A (83714) FAX
PO Box 83720 FTP Site
Boise, ID 83720-0074 X Email
C9 ���
Christy Davenport
Legal Administrative Assistant
APPLICATION - 15