20250409APPLICATION.pdf

RECEIVED
April 09, 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. PAC-E-25-06
APPLICATION TO UPDATE INPUTS TO THE )
SURROGATE AVOIDED RESOURCE ("SAR") ) APPLICATION
MODEL AND SAR-BASED AVOIDED COST )
RATES )
Commission Staff("Staff'),pursuant to Commission Rule of Procedure 52,the applicable
provisions of the Public Utility Regulatory Policies Act of 1978 ("PURPA"), and as directed by
Order No. 34628, respectfully applies to the Idaho Public Utilities Commission("Commission")
for an order updating inputs to the Surrogate Avoided Resource ("SAR") Model and approving
the SAR-based avoided cost rates attached to this Application.
L BACKGROUND
The Commission calculates and publishes SAR-based avoided cost rates for qualifying
facilities("QF")that are under the applicable resource type project eligibility cap. In Order No.
32697, the Commission found it was appropriate to annually update the SAR Model with the
most recent gas forecast provided by U.S.Energy Information Administration's("EIA")Annual
Energy Outlook, specifically the Mountain Region Reference Case forecast. Subsequently, the
Commission issued Order Nos. 32737 and 32802 to clarify that the annual update of the EIA
gas forecast should occur on June 1 or within 30 days of the final release of the EIA Annual
Energy Outlook, whichever is later. Order No. 32737 at 7 and Order No. 32802 at 3.
APPLICATION 1

Since then, Staff has used this data source for the annual natural gas forecast update for
the SAR Model. However, EIA did not publish an Annual Energy Outlook in 2024, because
their modeling system required substantial updates to better model hydrogen, carbon capture,
and other emerging technologies. Because that information was not published, in Case No.
GNR-E-24-01, Staff proposed using the average of AECO Hub prices, Stanfield Hub prices,
Sumas Hub prices, and Opal Hub prices from the natural gas price forecast published by
Northwest Power and Conservation Council ("NWPCC") for the annual update.
On December 9, 2024, the Commission issued Order No. 36416 approving Staffs
proposal. The Commission explained:
[O]ur approval of Staff s Application should not be interpreted as permanently
modifying the inputs and method for updating the SAR Model. Rather, this
approval shall continue only until the EIA publishes its next Annual Energy
Outlook that can be used to update the SAR Model. Additionally,we direct Staff
to notify the Commission if the EIA does not issue an Annual Energy Outlook
within the next 12 months following the service date of this final order.
Order No. 36416 at 3.
On January 31, 2025, the Commission issued Order No. 36452 in Case No. PAC-E-24-
04, approving the settlement stipulation for PacifiCorp d/b/a Rocky Mountain Power (the
"Company"), where parties adopted an overall rate of return ("ROR") of 7.25 percent.
II. UPDATED MODELS AND AVOIDED COST RATES
Staff updated the SAR Model and its avoided cost rates based on the proposed natural
gas price forecast and the recently approved ROR of 7.25 percent as attachments to this
Application for the Company to review including:
• Avoided Cost Model Order No. XXXXX ver June 1, 2025 Annual Gas Update and Rate
of Return (PAC).xlsm;
• Attachment A PAC Avoided Cost Rates for New Contracts
• Attachment B PAC Avoided Cost Rates for Renewal Contracts
Natural Gas Price Forecast
The updates to the natural gas price forecast use the same method approved in Case No.
GNR-E-24-01, the results of which are shown in Table No. 1 below. The method calculates the
average of AECO Hub prices, Stanfield Hub prices, Sumas Hub prices, and Opal Hub prices
from the 2025 natural gas price forecast published by NWPCC for the annual update in this
case.' In Order No. 36416, the Commission authorized the use of this method until the EIA
1 Data source:"Ninth Plan Natural Gas Price Forecast"located at
APPLICATION 2

publishes its next Annual Energy Outlook that can be used to update the SAR Model. As of
April 1, 2025, the EIA has not released the Annual Energy Outlook for 2025.
Table No. 1: Proposed Natural Gas Forecast based on Four Hubs
Year AECO Sumas Opal Stanfield Average
2025 2.38 3.51 3.45 3.38 3.18
2026 2.77 4.05 4.04 3.96 3.70
2027 3.00 5.20 5.05 4.86 4.53
2028 3.21 5.55 5.41 5.21 4.85
2029 3.38 5.81 5.69 5.48 5.09
2030 3.55 5.11 5.21 5.11 4.74
2031 3.55 5.11 5.21 5.11 4.74
2032 3.79 5.44 5.57 5.48 5.07
2033 4.19 5.99 6.18 6.08 5.61
2034 4.27 6.10 6.31 6.20 5.72
2035 4.43 6.33 6.55 6.44 5.94
2036 4.51 6.44 6.67 6.56 6.04
2037 4.68 6.66 6.91 6.80 6.26
2038 5.00 7.10 7.40 7.28 6.70
2039 5.20 7.38 7.71 7.58 6.97
2040 5.42 7.68 8.04 7.91 7.26
2041 5.55 7.86 8.23 8.10 7.43
2042 5.74 8.11 8.51 8.38 7.68
2043 6.02 8.50 8.94 8.80 8.06
2044 6.31 8.90 9.39 9.24 8.46
2045 6.62 9.33 9.85 9.70 8.88
2046 6.89 9.70 10.26 10.10 9.24
2047 7.17 10.08 10.68 10.52 9.61
2048 7.46 10.48 11.12 10.95 10.01
2049 7.77 10.90 11.58 11.40 10.41
2050 1 8.08 1 11.33 1 12.06 1 11.87 1 10.83
Rate of Return
The settlement stipulation approved in Order No. 36452 only adopted an overall ROR of
7.25 percent,without specifying the capital structure and the component costs. Therefore, Staff used
the capital structure and the component costs from Case No. PAC-E-10-07, the latest case where
those assumptions were approved by the Commission and have been used in the SAR Model,except
for the return on equity("ROE"). Staff used these assumptions to impute an ROE of 8.51 percent to
achieve an ROR of 7.25 percent approved in Order No. 36452. A similar treatment was approved in
Case No. IPC-E-24-04,where previously approved capital assumptions were used to impute the cost
of debt for the SAR Model.
hgps://www.nwcouncil.oriz/energ /�powep2lan/elements-and-inputs/
APPLICATION 3

III.MODIFIED PROCEDURE
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. RP 201, et seq. If, however, the Commission determines
that a technical hearing is required, Staff stands ready to prepare and present its testimony in
such a 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 Yao Yin
Deputy Attorney General Idaho Public Utilities Commission
P.O. Box 83720 P.O. Box 83720
Boise, Idaho 83702-0074 Boise,ID 83702-0074
chris.burdink]2uc.idaho.gov yao.yinkpuc.idaho.gov
V. REQUEST FOR RELIEF
Staff respectfully requests the Commission issue an order: (1) authorizing this matter to
be processed by Modified Procedure; (2) approving the updated SAR Model for the Company
with an effective date of June 1, 2025; and (3) approving the avoided cost rates shown in the
attachments to this Application with an effective date of June 1, 2025.
Respectfully submitted this 9 h day of April 2025.
C�.
Chris Burdin
Deputy Attorney General
APPLICATION 4

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 9th day of April 2025, I served the foregoing
APPLICATION,in Case No. PAC-E-25-, Via E-Mail to the following:
Mark Alder
Joe Dallas
Rocky Mountain Power
1407 West North Temple, Ste. 330
Salt Lake City, UT 84116
[e-mail]
joseph.dallas(ibpacificorp.com
KERI J. 14AVVIUR
Legal Assistant
APPLICATION 5