20250331STAFF APPLICATION.pdf

RECEIVED
March 31, 2025
CHRIS BURDIN IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9810
Street Address for Express Mail:
11331 W CHINDEN BVLD,BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF COMMISSION STAFF'S ) CASE NO. GNR-E-25-01
APPLICATION FOR APPROVAL OF AN )
OVERSIGHT PROCESS FOR THE ) STAFF'S APPLICATION
ACQUISITION OF LARGE SUPPLY-SIDE ) TO UPDATE THE RFP
ELECTRICAL RESOURCES ) OVERSIGHT PROCESS
Commission Staff("Staff'),pursuant to Commission Rule of Procedure 52, and as directed
by Order No. 36309, hereby submits this application ("Application") to the Idaho Public Utilities
Commission ("Commission") requesting that the Commission modify its Request for Proposal
("RFP") oversight process.
The primary objective of Staff's proposal is to establish a regulatory process that will
ensure resources selected by Idaho's investor-owned electric utilities ("Utility" or"Utilities") are
least-cost and least-risk and are able to meet the required needs of the system while:
(1) Minimizing the amount of administrative burden and potential delays needed for
Utilities to make a resource decision;
(2) Maximizing the Utility's flexibility to tailor its selection process for a given set of
circumstances when requiring additional resources; and
(3) Adhering to a set of requirements and guiding principles (Attachment A to the
Application) when developing its selection process for each new set of resources.
STAFF'S APPLICATION TO UPDATE THE RFP OVERSIGHT PROCESS 1

Specifically, Staff proposes that the Commission: (1) rescind Order No. 32745 for Idaho
Power to comply with Oregon RFP guidelines, and(2)direct each Utility' to apply for and receive
Commission approval for each new RFP prior to issuing it for the acquisition of large supply-side
resources in accordance with the requirements outlined in Attachment A.
For the proposed process, each new RFP application should include the proposed RFP, a
written explanation of the process that will be used to narrow the bid pool and select the final
resource(s) ("Selection Plan"), and other supporting documents.
Accompanying this Application is the Direct Testimony of Matthew E. Suess presenting
Staff's findings and reasoning for this proposal.
If this proposal is approved, Staff, interested parties, and the Commission will be able to
review how Utilities will conduct each solicitation and selection to ensure the least-cost and least-
risk resource(s) are selected based on the specific circumstances and needs of the Utility's system
prior to soliciting bids. This proposal will also provide Utilities the additional benefit of having
clarity of the Commission's requirements for each solicitation and selection of resources.
I. BACKGROUND
In 2008, the Northwest and Intermountain Power Producers Coalition ("NIPPC"), filed a
Petition to open a generic investigation regarding"the desirability of initiating competitive bidding
guidelines for the procurement of supply-side resources by the electrical utilities2...." The
Industrial Customers of Idaho Power,the J.R. Simplot Company,and the Idaho Irrigation Pumpers
Association, Inc., collectively Petitioners,joined the Petition, assigned as Case No. GNR-E-08-
03.
The Petitioners were concerned that the Utilities had financial incentive to self-build large
supply-side resources and — without a defined process and oversight — might pursue this option
even if it wasn't the least-cost, least-risk course of action.
After a year of legal filings by various Parties, NIPPC moved to narrow the scope of the
case to only Idaho Power Company ("IPC"), because "the other two relevant electric utilities
operating in Idaho already [complied] with competitive procurement rules in the other states in
which they operate[d].3"
'Excluding Atlanta Power Company/Greylock Energy Holdings,LLC.
2 GNR-E-08-03,Application at 1.
3 GNR-E-08-03,Motion To Narrow Scope of Proceeding at 2.
STAFF'S APPLICATION TO UPDATE THE RFP OVERSIGHT PROCESS 2

The Commission agreed with the Motion, narrowed the scope, closed Case No. GNR-E-
08-03 and initiated Case No. IPC-E-10-03.4
Parties filed to establish a procedural schedule in May 2010,but no further action was taken
until 2013. In January 2013, Staff filed a Motion to close the case, explaining that IPC was now
bound by competitive bidding guidelines in the state of Oregon. IPC also filed a statement
confirming that it would follow those guidelines in Idaho. Furthermore, IPC did not foresee any
capacity deficits that would require it to procure new supply-side resources. The Commission
closed the case in February 2013, and ordered IPC:
to comply with RFP guidelines applicable in its Oregon service area, should the Company
commence an RFP process for a new supply-side resource prior to the development of
Idaho-specific RFP guidelines.'
This order from the Commission has not been changed or superseded in the ensuing 11 years.
In 2022, IPC again faced a capacity deficit and needed to procure additional supply-side
resources.Accordingly, IPC complied with the Oregon RFP process, spending the next 17 months
working with the Oregon Public Utilities Commission("OPUC") to develop an RFP, evaluate the
bids, and develop a Final Short List ("FSL") of potential winning bidders.
After negotiating a power purchase agreement with one of the FSL bidders, IPC filed Case
No. IPC-E-24-12 requesting Commission approval of that agreement.As part of its Comments in
that case, Staff recommended that the Commission direct IPC to file any subsequent RFP
solicitations in Idaho for Commission approval before releasing the REP to bidders. Instead, the
Commission directed IPC to work with Staff to develop potential modifications to the RFP process
and directed Staff to file a new case with proposed modifications no later than March 31, 2025.
Order No. 36309 at 4.
II. RECOMMENDED SOLUTION
In compliance with the Commission order, Staff recommends that the Commission order
electric Utilities to file an RFP and a Selection Plan for review, when applicable, in accordance
with Attachment A. Staff outlines its reasoning in the sections below.
a GNR-E-08-03,Order No. 30999 at 6.
s IPC-E-10-03,Order No.32745 at 2.
STAFF'S APPLICATION TO UPDATE THE RFP OVERSIGHT PROCESS 3

Establish An Idaho Process
Staff proposes that the Commission end its reliance on other states,which will ensure each
Utility conducts fair and impartial solicitations for large supply-side resources aligned with the
Idaho Commission's priorities.
As described in the background section of this Application, the Commission currently
relies on other states to oversee each Utility's acquisition of large resources. For IPC, the
Commission specifically ordered the company to follow the OPUC process. For PacifiCorp and
Avista,the Commission implicitly relies on the fact that those Utilities are subject to the acquisition
processes of other states.
However, because other states may not share the same priorities as Idaho, Staff believes it
is in the best interest of Idaho ratepayers to end the explicit link to the OPUC process, to end the
implicit dependence on other states, and to establish an Idaho process that ensures Idaho priorities
are maintained.
Scope of Applicability
Staff believes that oversight of each Company's solicitation process should be applied as
infrequently as possible to minimize regulatory impact.
First, Staff proposes this oversight should only apply to the largest acquisitions. Given the
large fiscal size of electrical utilities, relative to gas and water utilities, Staff proposes that this
process apply only to the electrical utilities (excluding Atlanta Power Company, which is a very
small company). If future experience reveals a need for oversight of other utility acquisitions, Staff
proposes addressing the issue at that time.
Second, Staff proposes this oversight should only apply to the acquisition of resources
above a certain size and life-cycle duration. Setting size and duration thresholds allows smaller,
less consequential investments to proceed without delay. Only the most financially consequential
investments would be subject to additional regulatory oversight. Other states have set this
threshold at either 80 megawatts ("MW") and a 5-year duration, or 100 MW and a 10-year
duration. Staff believes that very few acquisitions are likely to fall between these two thresholds
and therefore recommends the Commission adopt the higher threshold (100 MW / 10-years) to
minimize the regulatory burden.
Third, Staff proposes the oversight should only apply to the acquisition of generation and
storage resources, while omitting transmission resources. Staff believes that transmission
STAFF'S APPLICATION TO UPDATE THE RFP OVERSIGHT PROCESS 4

resources are essentially homogenous in type, and therefore the acquisition of a transmission
resource isn't subject to the same bias risks that are inherent to generation and storage resources.
This differentiation is consistent with other states'policies.
Lastly, Staff proposes that the oversight should apply only if the Utility intends to recover
the investment costs from Idaho ratepayers. If a Utility pursues the acquisition of a resource in
another state and intends to situs-assign the cost of that resource, then no oversight by the
Commission is necessary.
In summary, Staff recommends that Attachment A be applicable to electric utilities seeking
to acquire a generation or storage resource of at least 100 MW and 10-year duration, and only if
Idaho ratepayers will be subject to cost recovery for that resource.
The Proposed Process
The proposed process requires each Utility to submit its RFP, Selection Plan, and other
supporting documents in an application to the Commission for approval before the RFP is released
to bidders.
Staff proposes the essential information that should be submitted by each Utility in its
Application is a copy of the RFP it plans to issue to prospective bidders, the Selection Plan
describing how the Utility will reduce the bid pool to ultimately select least-cost least-risk
resources, the plan for advertising the RFP to potential bidders, and other documents related to the
solicitation. Staff also proposes the Utility's Application should include supporting justification of
the need for new resources.
The Selection Plan typically includes bid qualification criteria, scoring factors and
weighting, cost assessment methods, modeling assumptions to evaluate cost and reliability, the
overall elimination process, and the process for preparing and evaluating internal benchmark bids.
Other Considerations
Staff identified three other issues for the Commission to consider: 1) independent
evaluators; 2) filing timelines; and 3) a waiver process for emergencies.
Independent evaluators ("IE") are third-party experts hired to ensure the integrity of a
Utility's acquisition process. Some states prescribe them. Staff believes that the requirement to
hire an IE adds delay and cost to the acquisition process, so the use of an IE should be minimized.
Staff recommends that an IE not be automatically required but merely considered during the initial
RFP review. In most cases, other states will already require an IE, so Idaho can leverage that IE's
STAFF'S APPLICATION TO UPDATE THE RFP OVERSIGHT PROCESS 5

oversight. In the rare case that another state does not require an IE,and Idaho deems one necessary,
the Commission can prescribe one as part of its RFP review.
Some states choose to prescribe time constraints for when Utilities can file RFPs, and
mandatory timelines for processing an application. Because Utilities can request an effective date
with justification that depends on the circumstances of each acquisition, Staff does not believe it
is necessary to prescribe any time requirements.
Staff recognizes that this oversight process can add delay to the overall acquisition timeline.
Therefore, Staff believes it is important to add a waiver process for emergency situations. If a
Utility requires a time-sensitive acquisition, Staff proposes that the Idaho process allow a Utility
to issue its RFP without prior Commission approval. Instead, the Utility should file its application
concurrently, or at the earliest opportunity, along with an explanation of why the normal review
sequence can't be followed.
In situations where a unique economic resource opportunity is available to the Utility
outside of the normal RFP process, Staff proposes that the process should allow for the Utility to
file a waiver application—in lieu of the normal RFP application—requesting review and approval
of the unique acquisition.
III. MODIFIED PROCEDURE
Commission Staff believes that a hearing is not necessary to consider the issues presented
herein and respectfully requests that this Application be processed by Modified Procedure; i.e.,by
written submissions rather than by hearing. Idaho Public Utilities Commission Rules of Procedure
201-204, IDAPA 31.01.01.201-.204. If, however, the Commission determines that a technical
hearing is required,the Commission Staff stands ready to prepare and present its testimony in such
hearing.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
Communications and service of pleadings, exhibits, orders, and other documents
relating to this proceeding should be sent to the following:
Chris Burdin Mike Louis
Deputy Attorney General Idaho Public Utilities Commission
P.O. Box 83720 P.O. Box 83720
Boise, Idaho 83702-0074 Boise,ID 83702-0074
chris.burdinkpuc.idaho.gov mike.louis(&,puc.idaho.gov
STAFF'S APPLICATION TO UPDATE THE RFP OVERSIGHT PROCESS 6

V. REQUEST FOR RELIEF
Staff respectfully requests the Commission issue an order that: (1) rescinds Order No.
32745 for Idaho Power to comply with Oregon RFP guidelines; (2) directs each Utility to apply
for and receive Commission approval for each new RFP prior to issuing it for the acquisition of
large supply-side resources in accordance with the requirements outlined in Attachment A.
Respectfully submitted this 31 st day of March 2025.
0, , � A- -
Chris Burdin
Deputy Attorney General
s Excluding Atlanta Power Company/Greylock Energy Holdings,LLC.
STAFF'S APPLICATION TO UPDATE THE RFP OVERSIGHT PROCESS 7

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 31" day of March 2025, 1 served the foregoing
APPLICATION, in Case No. GNR-E-25-01, via Electronic Mail to the following:
Donovan Walker Mark Alder
Idaho Power Company Joe Dallas
1121 W. Idaho Street 83702 Rocky Mountain Power
P.O. Box 70 1407 West North Temple, Ste. 330
Boise, ID 83707-0070 Salt Lake City, UT 84116
dwalkergidahopower.com mark.aldergpacificorp.com
dockets(kidahopower.com joseph.dallaskpacificorp.com
David Meyer
Avista Corporation
P.O. Box 3727
1411 East Mission Avenue
Spokane, WA 99220-3727
david.meyer(k avi stacorp.com
avistadockets(ae,avistacorp.com
KERI J. HAWKER
Legal Assistant
STAFF'S APPLICATION TO UPDATE THE RFP OVERSIGHT PROCESS 8

Procedure for Soliciting
Large Supply-Side Resources
This document establishes the Idaho Public Utility Commission's procedure for electric utilities to
solicit large supply-side resources.
Guiding Principles:
1. The solicitation should issue a Request for Proposal ("RFP") that maximizes competition
between bidders and is resource-agnostic, soliciting bids from all feasible resource types (e.g.
with respect to technology, fuel type, resource size, ownership arrangements, etc.), and with
sufficient lead time that allows all potential bidders to meet the date when resources are needed.
2. The RFP selection process should be designed to select least-cost least-risk resources that
satisfy the system need. The selection process should avoid bias toward any other objectives,
unless those objectives are clearly stated and convincingly justified.
3. The RFP and selection process should ensure competition, transparency, confidentiality, and
fairness through all stages of the procurement process. The process should be designed to
ensure:
a. communication with all those involved to promote understanding of the elements
of the process including procedures, timelines, requirements, and criteria for
selection;
b. processes that are open, competitive and accessible to all qualified
suppliers/contractors avoiding favoritism or discriminatory practices;
c. honesty and integrity in all interactions with suppliers/contractors and avoids any
form of unethical behavior;
d. conflicts of interest among utility personnel are mitigated and to ensure impartial
decision-making; and
e. adherence to legal and regulatory requirements.
Case No. GNR-E-25-01 Attachment A to the Application
Page 1 of 3

Procedure:
This procedure is applicable to any solicitation for electrical supply-side generating or storage
resources of 100 MW or greater for a duration of 10-years or more that will be subject to recovery
from Idaho ratepayers.
1. Standard Solicitation Process:
a. Prior to issuing the RFP, the Company must file an application with the Commission and
obtain approval. The application should include the RFP,the RFP Selection Plan',the RFP
Announcement Plane, and other documents relevant to the solicitation.
b. The application should justify the need for new resources.
c. The Company may request an effective date for Commission approval.
d. As part of its decision, the Commission may require an Independent Evaluator to
participate in the subsequent RFP selection process.
2. Waiver Process:
a. In rare situations, the Company may defer Commission pre-approval of its RFP in
accordance with this waiver process.
b. For emergency situations:
i. The Company may release its RFP immediately but should follow up with submission
of the RFP application at the earliest opportunity.
ii. This deferred application must include a robust explanation of the extenuating
circumstances.
c. For unsolicited economic-based opportunities outside of the RFP process:
i. The Company should file an application for review and approval of the unique
economic opportunity, with clear justification of why the normal RFP process should
not apply.
ii. It should also justify the need and/or the economic value of the opportunity.
1 The Selection Plan is the written process by which proposals will be evaluated to identify the final shortlist. This
typically includes scoring factors, disqualification criteria, cost assessment methods, the modeling assumptions for
cost and reliability determinations, and the overall elimination process. It should define the process for preparing,
receiving,and evaluating internal benchmark bids. It also includes the solicitation schedule and identifies the selecting
official(s).
z The Announcement Plan is how and when the RFP will be advertised to potential bidders.
Case No. GNR-E-25-01 Attachment A to the Application
Page 2 of 3

3. Post-Selection Process:
a. If a Certificate of Public Convenience and Necessity ("CPCN") is required, the Company
should file an application for Commission approval.
b. If a CPCN is not required, the Company may file an application for review of the final
resource selection and determination of decisional prudence.
c. Alternatively, the Company may wait until its next rate case before filing for prudence and
recovery.
d. In all cases,the application for prudence determination should include robust evidence that
the RFP process was followed fairly, and that the final resource selected was least-cost and
least-risk.
Case No. GNR-E-25-01 Attachment A to the Application
Page 3 of 3