20250321Comments_1.pdf

From: Michael Heckler
Sent: Friday, March 21, 2025 2:26 PM
To: secretary
Cc: Courtney White
Subject: CEO comments re IPC-E-24-44
Hello Monica,
couldn't figure out how to link my pdf version comments into the website's form for comment
submittal. I could see how to type in comments but the attached is pretty extensive and includes
more than just text input.
Can you accept the attached comments from Clean Energy Opportunities for Idaho in regard to
IPC-E-24-44 or, if not, let me know how I can get our comments submitted before the oral
arguments next Tuesday?
Thankyou for your assistance in this matter.
Best regards, Mike Heckler
1

Clean -Energy Opportunities for Idaho
March 21, 2025
Reference: Case No. IPC-E-24-44—Application for approval of special contract and
tariff schedule 28 to provide electric service to Micron Idaho
Semiconductor Manufacturing(Triton) LLC
Subject: Comments of Clean Energy Opportunities for Idaho
Micron Idaho Semiconductor Manufacturing's (Triton) proposed power load is of a scale unlike
any other customer Idaho Power has. The mission of our nonprofit includes serving the long-term
interests of Idahoans.Within that public interest context, and for reasons detailed below, CEO
respectfully puts forward two suggestions:
1. Triton load growth will have a substantial effect on future system costs. The cost
dynamics later this decade will no longer be those reflected in the 2023 historical
embedded costs Idaho Power proposes to use in this service agreement. Any Triton rate
design resulting from this docket should be effective for a duration not to exceed 2 years.
During that 2 year period a more accurate and holistic cost review can be completed and
a more future-resilient Triton rate design developed for application in succeeding years.
2. Marginal cost causation is not flat across hours of the day, day of the week or season of
the year. Triton's marginal energy rates should not be flat across all hours of the day and
year.
By 2030 Triton will be the second largest Idaho jurisdiction customer class. The scale of the
proposed Triton load is breathtaking. If the Triton load increases at the rates presented for
Contract Demand in Exhibit 3 of the IPC/Triton contract, then Triton annual load will exceed the
entire annual load for whole Idaho jurisdiction customer classes, including:
• By June 2026 Triton load exceeds all 4 existing Special Contract customers'
• By October 2027 Triton load exceeds all 27,000 Irrigation customers
• By February 2028 Triton load exceeds all 120 Large Industrial customers
• By June 2030 Triton load exceeds all 38,000 Commercial customers
The vote of confidence represented by Micron's enormous investments in Idaho is much
appreciated. Nonetheless,the size of this new customer calls into question whether the
methods previously used for calculating rates for special contract customers, who individually
represented a relatively small portion of overall load, is fair and reasonable when applied to a
single customer that is larger than most customer classes and that could potentially represent
almost 20% of total system load by the end of this decade2.
' Customer numbers and class annual MWh consumption are based on 2023 actuals. Triton load is calculated as
an annualized consumption based on the rate of usage in the month referenced.
2 Triton June 2030 load of about 480aMW implies 4.2 terawatt-hours per year of Triton consumption vs total forecast
2030 system load of approximately 21.5 terawatt-hours(see Figure 1 below).
Clean Energy Opportunities for Idaho - Comments - IPC-E-24-44 pagel

`� Clean Energy Opportunities for Idaho
Using a "pre-Triton" methodology for cost allocation will not be fair when Triton's
requirements transform future cost dynamics and resource composition. Idaho Power
expects to double its net rate base over the next 5 years.3 The composition of system resources
is growing rapidly with associated increases in the cost of service. The cost dynamics later this
decade will no longer be those reflected in the 2023 historical embedded costs Idaho Power
proposes to use in this service agreement.
Micron points out that Triton is not"solely`causing a need for particular additional generation
and/or transmission resources. Other customer classes are growing load at around 1% per year.
Triton is the outlier.
Take a look in Figure 1 below at the shape of the load curve during the 2026-2030 period.
Between 2026 and 2030 Idaho Power's annual system sales rate is expected to increase by about
5 or 6 terawatt-hours/year. As is noted in footnote 2 above, by mid-2030 new Triton load is
expected to represent about 4 terawatt-hours/year of that increase. The unprecedented need
for additional generation and/or transmission resources that is driving the doubling of Idaho
Power net rate base this decade is in large part due to Triton load growth.
�IQAHO POWER
System Sales Forecast Results
Annual System Energy Sales(GWh)
—Weather Adjusted .....Nov.Presentation ---Jan.Update —Current
27,000
502 G W h
25,000 ------ ----
.................. 2,173 GWh
23,000
21,000
Growth Rate
19,000 2025)
17,000
5-year historic Current 8.3% 2.7%
annual growth Jan.Update 7_8% 2.5%
15,000 1.2%
Nov.Presentation 7.7% 2.2%
13,000
2015 2020 2025 2030 2035 2040 2045
5
Figure 1 —Idaho Power Annual System Energy Sales forecasts
31DACORP Earnings Call, 11/03/2024.The company expects to double its net rate base in five years,with a CAGR of
16.9%.
4 See Micron RESPONSE TO IIPA'S OBJECTION AND MOTION, page 7
5https://docs.idahopower.com/pdfs/AboutUs/PlanningForFuture/IRPAC_DemandForecastUpdate_Mar13.pdf
Clean Energy Opportunities for Idaho - Comments - IPC-E-24-44 page2

V Clean -Energy Opportunities for Idaho
Per the schedule implied in IPC/Triton contract Exhibit 2, the rate structure applied in this docket
could impact other customers for 20+years6. The implied contract length and proposed
methodology for determining demand charges in the proposed ESA unfairly shields Triton from
future costs that Triton load growth will cause. The potential for creating cross-class subsidies in
Triton's favor if the proposed ESA is accepted without modification is enormous.
New generation and transmission resources interact with existing system resources in
complicated ways. Identifying and allocating marginal capacity cost causation is inherently
complicated. Idaho Power argues that pricing within this ESA should not be"conflated"with
concerns over customer class cost allocation for future resources and suggests that those cost
allocations should be addressed in "future general rate cases or other single-issue ratemaking
proceedings."'
Based upon lessons learned in CEO's analysis of Cost of Service methodologies (per IPC-E-23-
11 stipulations), we strongly believe there are opportunities to improve upon the accuracy of the
methods for used for demand allocation in the proposed ESA. We agree with Idaho Power's
conclusion -that due to the inherent complexity of cost allocation issues, as well as matters
related to effective notice to all potentially affected parties, this docket is not the appropriate
venue for resolving such matters.
However, approving the ESA as proposed -without holistically reviewing the basis for Triton's
future demand charges - presents cross-subsidy risks that CEO believes to be contrary to the
public interest. For these reasons, CEO suggests that any approval of the proposed ESA be
tightly constrained in duration and only extended after an appropriate review of cost allocations
has been completed.
Aurora runs are no longer the most accurate source for estimating future marginal energy
prices. Idaho Power increasingly participates in energy market transactions. After netting out bi-
lateral and EIM sales by Idaho Power to other parties, 7% of the annual total customer sales
volume in 20238 used to serve customer load was purchased in bi-lateral or EIM markets.
Improved market access via new transmission like B2H and SWIP-N,will likely increase such
transaction volumes. Market prices are now, and will be even more indicative in the future, of the
marginal energy prices that Idaho Power faces. Market prices area much better indicator of
marginal energy prices than the traditional reliance on Aurora runs proposed in the application.
The marginal energy rate proposed in the application has at least two significant deficiencies.
6 IPC/Triton contract Exhibit 2 shows credit support terminated after 16 years starting in 2030 implying the demand
charge being in effect out through 2046.
See IPC response to IIPA and ICIP,section 54, page 21
8 See Figure 2,CEO hourly informed Bulk Power System COS analysis, previously supplied to all parties in this
docket
Clean Energy Opportunities for Idaho - Comments - IPC-E-24-44 page3

V Clean -Energy Opportunities for Idaho
First, as displayed in Figure 2 below, Idaho Power is offering Triton an energy price that is
substantially less than the forecasted market marginal energy prices which the Company faces.
This below market rate represents an additional source of potential cross-subsidy and should be
carefully reviewed.
Second, the energy rate proposed in the ESA is flat in all hours and seasons of the year. The flat
rate structure is inconsistent with criteria agreed with PUC staff for determining marginal costs.9
Cost causation is not flat per hour, and rates should reflect that variation. Irrespective of
whether Triton currently expects to have limited ability to modify the timing of its loads in
response to time varying rates, no rate presented as"marginal"should be flat through all hours
of the year.
Costs vary by hour- so should rates. E.g,the market prices below are
indicative of future marginal cost pattern across hours of the day:
70 /MWh
Mid-C Price Forecast Average by hour
based on 8760 forecasts for 2026-2030 per most
60 recent IRP, IPC-E-24-23
50
40
30
20 Micron Monthly Energy Charge
proposed in IPC-E-24-44
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of Day
Sources:IPC-E-24-44,Attachment 2—Proposed Tariff Schedule(pdf p51);8760 Mid-C data,20231RP Data,sourced from IPC-E-24-23;CEO catc of averages
Figure 2—proposed marginal energy price is below realistic marginal energy pricing
9 Application Appendix 5—in relevant part -"The marginal cost rates should have enough granularity to reflect time
difference(e.g.seasonality,time of day)value of the Marginal Cost within the Company's system to provide accurate
price signals:
Clean Energy Opportunities for Idaho - Comments - IPC-E-24-44 page4

V Clean -Energy Opportunities for Idaho
To address the appropriateness of forward pricing in certain large PURPA contracts, the
Commission has previously determined that 2-year contracts were more fair and reasonable
than 20-year fixed price contracts.
In setting an export credit rate (ECR rate)for customers with self-generation, the Commission
ordered a 3-phase comprehensive review which resulted in an annually updated ECR rate.
The scale of the system cost impacts that Triton's new load presents are no less complex than
the large PURPA contracts or the appropriate ECR rate. The public is no less deserving of a
holistic review of these Triton rate design matters.
CEO asks that the Commission give careful consideration to the two suggestions we have made
before approving the application as submitted.
Respectfully submitted,
Michael Heckler
Policy Director
Clean Energy Opportunities for Idaho
Clean Energy Opportunities for Idaho - Comments - IPC-E-24-44 pagg