20250430Direct Aschenbrenner.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY' S APPLICATION FOR ) CASE NO. IPC-E-24-44
APPROVAL OF SPECIAL CONTRACT AND )
TARIFF SCHEDULE 28 TO PROVIDE )
ELECTRIC SERVICE TO MICRON IDAHO )
SEMICONDUCTOR MANUFACTURING )
(TRITON) LLC. )
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
CONNIE G. ASCHENBRENNER

1 Q. Please state your name, business address, and
2 present position with Idaho Power Company ("Idaho Power" or
3 "Company") .
4 A. My name is Connie G. Aschenbrenner. My
5 business address is 1221 West Idaho Street, Boise, Idaho
6 83702 . I am employed by Idaho Power as the Policy and
7 Pricing Director in the Regulatory Affairs Department.
8 Q. Please describe your educational background.
9 A. In May of 2006, I received a Bachelor of
10 Business Administration degree in Finance from Boise State
11 University in Boise, Idaho . In December of 2011, I earned a
12 Master of Business Administration degree from Boise State
13 University. I have attended several conferences and
14 trainings relevant to my roles and in 2023, I attended the
15 Energy Executive Course offered through the University of
16 Idaho .
17 Q. Please describe your work experience with
18 Idaho Power.
19 A. In 2012, I was hired as a Regulatory Analyst
20 in the Company' s Regulatory Affairs Department. My primary
21 responsibilities included support of the Company' s
22 Commercial and Industrial customer class' s rate design and
23 general support of tariff rules and regulations . In my time
24 as a Regulatory Analyst, I also provided support for
25 Residential and Small General Service rate design, as well
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Idaho Power Company

1 as regulatory support associated with demand-side
2 management ("DSM") activities . In 2017, I was promoted to
3 Rate Design Manager for Idaho Power, in 2019, I was
4 promoted to Rate Design Senior Manager, and in April of
5 2025, my responsibilities expanded to include overseeing
6 regulatory policy and strategy. In my role as Policy and
7 Pricing Director, I am responsible for overseeing
8 development of pricing strategies - including those for
9 special contract customers, tariff administration, and
10 providing strategic direction on a variety of topics
11 including integrated resource planning, demand-side
12 management, and wildfire mitigation activities .
13 I . INTRODUCTION
14 Q. What is the Company requesting in this case?
15 A. Idaho Power is requesting approval of an
16 Energy Services Agreement ("ESA") for Micron Idaho
17 Semiconductor Manufacturing (Triton) LLC ("Micron") to
18 provide retail electric service to its new memory
19 manufacturing complex ("Micron FAB") . Specifically, Idaho
20 Power is requesting the Idaho Public Utilities Commission
21 ("Commission") issue an order approving: (1) the Micron FAB
22 ESA, included as Attachment 1 to the Application; (2) the
23 Contract Demand and Billing Demand Charges set forth in
24 Schedule 28, included as Attachment 2 to the Application,
25 adjusted to reflect the composite rate change authorized
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Idaho Power Company

1 for special contract customers in Case No . IPC-E-24-07; (3)
2 the Energy Charge set forth in Schedule 28 through May 31,
3 2025; and (4) authorizing the requested accounting
4 treatment of energy sales under the ESA.
5 Q. How is the Company' s case organized?
6 A. The Company begins the presentation of its
7 case with my testimony, which consists of three sections .
8 First, I will provide an overview of the Company' s approach
9 to evaluating large load requests for service, focusing on
10 how the Company' s policies ensure that new large load
11 requests for service do not cause upward pressure on other
12 customers' rates . Next, I will provide an overview of the
13 Micron FAB ESA, with a focus on the terms intended to
14 provide adequate safeguards for the rest of the Company' s
15 customers . Finally, I will describe the Company' s proposed
16 accounting treatment for energy-related charges under the
17 ESA.
18 The direct testimony of Grant T. Anderson, Pricing
19 and Tariff Administration Leader, details the pricing
20 structure of the ESA and the no-harm analysis conducted to
21 demonstrate that the Micron ESA does not negatively impact
22 Idaho Power' s other retail customers . The direct testimony
23 of Jared L. Ellsworth, Transmission, Distribution, and
24 Resource Planning Director, provides an overview of how the
25 Company' s planning process evaluates resource needs
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Idaho Power Company

1 associated with the Company' s system, explains the resource
2 planning work conducted to support the no-harm analysis,
3 and provides an overview of the basis for the scope of work
4 contained in the Construction and Procurement Agreements
5 executed between Idaho Power and Micron .
6 II . LARGE LOAD REQUESTS
7 Q. What is considered a "large load request" and
8 what tariff schedules do those customers ultimately qualify
9 to take service under?
10 A. Idaho Power considers a request for new
11 electric service of greater than one megawatt ("MW") a
12 large load service request. Generally, a large load
13 customer will qualify to take service under Schedule 19,
14 Large Power Service ("Schedule 19") , which is available to
15 and mandatory for customers who register a metered demand
16 of 1 MW or more during three or more billing periods over a
17 12-month period, but whose aggregate power requirements on
18 the same premise does not exceed 20 MW. A large load
19 customer may initially take service under Schedule 9, Large
20 General Service ("Schedule 9") , until they meet the minimum
21 1 MW billing demand.
22 If the large load' s aggregate power needs are
23 greater than 20 MW, they are ineligible for service under
24 Schedule 19 and are required to make "special contract
25 arrangements" with the Company.
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Idaho Power Company

1 Q. What is the significance of requiring special
2 contract provisions for requests for service of greater
3 than 20 MW?
4 A. This requirement serves several purposes .
5 First, it allows for the unique characteristics of a
6 customer of this size to be captured within the terms of a
7 Commission-approved ESA. Second, special contracts allow
8 for specific cost-of-service information for each ESA
9 customer to be reviewed during rate proceedings . Third,
10 special contracts can include provisions intended to
11 provide protections to the Company and its other retail
12 customers from the impacts that some large loads could
13 impose because of sheer size and operating characteristics .
14 Q. Please provide an overview of how the Company
15 evaluates a new large load service request.
16 A. Generally, and regardless of whether the
17 prospective customer will qualify to take service under
18 Schedule 19 or will be required to negotiate a special
19 contract, the Company evaluates whether there are existing
20 facilities of adequate capacity and desired voltage
21 available to meet the request . In the case of a request
22 that is eligible for service under published Schedule 9 or
23 Schedule 19 rates, if no distribution or transmission
24 upgrades are required to serve the prospective customer,
25 they can proceed with establishing service.
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Idaho Power Company

1 On the other hand, if there are not facilities of
2 adequate capacity and voltage available, the Company will
3 conduct a study to determine what facilities are necessary
4 to interconnect. Following the study, the scope of
5 necessary upgrades, an estimated timeline to construct, and
6 an estimated cost are presented to the prospective
7 customer. If the prospective customer elects to move
8 forward with the project, they are required to enter into a
9 Construction Agreement .
10 Q. What is a Construction Agreement?
11 A. A Construction Agreement is a contract entered
12 into between Idaho Power and a prospective customer and
13 outlines a detailed scope of work, estimated costs, project
14 milestones, and other terms and obligations of Idaho Power
15 and the customer. A Construction Agreement is negotiated
16 between Idaho Power and the prospective customer once the
17 applicant has requested that Idaho Power proceed with
18 design work, engineering, and construction necessary to
19 interconnect their load. Additionally, the Construction
20 Agreement lays out terms related to payment milestones,
21 including provisions outlining that the prospective
22 customer will make upfront payments - referred to as a
23 Contribution in Aid of Construction ("CIAC") - in advance
24 of the work being completed. In the event a Construction
25 Agreement has not yet been executed, but the prospective
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Idaho Power Company

1 customer requests that the Company move forward with
2 procuring long-lead time pieces of equipment, Idaho Power
3 will enter into a Procurement Agreement. Again, the terms
4 of this type of agreement require the prospective customer
5 to provide an upfront CIAC to ensure they cover the full
6 costs associated with the project.
7 Q. What is the significance of requiring a CIAO
8 for these types of projects?
9 A. When the Company invests in infrastructure to
10 serve customers, it is provided an opportunity to earn a
11 reasonable return on those investments deemed prudent by
12 the Commission. It has been a long-standing policy of the
13 Commission that, to the extent feasible, costs should be
14 assigned to a cost-causer to mitigate upward pressure on
15 rates that would otherwise exist. A CIAC is booked as a
16 credit against the plant investment in rate base, which
17 means the Company is not entitled to recovery of or on that
18 plant amount .
19 Q. Does the Construction Agreement contemplate
20 generation needed to interconnect a prospective large load
21 customer?
22 A. No. The scope of work covered under a
23 Construction Agreement is generally limited to
24 distribution, substation, and transmission work that - but
25 for the applicant' s request - would not be constructed by
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Idaho Power Company

1 Idaho Power. Idaho Power does not procure generation or
2 transmission resources that are solely dedicated to an
3 individual customer, and therefore, those are out of the
4 scope of what is contemplated in a Construction Agreement.
5 Q. How does Idaho Power plan for the generation
6 or system transmission needs of a special contract customer
7 whose size may impact its long-term resource planning?
8 A. Idaho Power has an obligation to provide
9 service to all customers, including requests for service of
10 greater than 20 MW. Idaho Power conducts an Integrated
11 Resource Plan ("IRP") every two years and has historically
12 included the load forecast of a prospective large load
13 customer into the planning process once the prospective
14 customer has indicated, through a signed and funded
15 Construction Agreement and/or Procurement Agreement, it
16 intends to move forward with establishing service.
17 Q. How does a special contract address concerns
18 about potential upward pressure on rates for Idaho Power' s
19 other customers?
20 A. The special contract process allows for
21 pricing provisions to be developed based on an individual
22 customer' s operating characteristics and considers current
23 system realities as well . That contract must ultimately be
24 presented to the Commission for review and approval and the
25 Commission must find that the special contract - including
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Idaho Power Company

1 the pricing provisions and other contractual terms - are in
2 the public interest.
3 Q. How many special contract customers does Idaho
4 Power provide service to?
5 A. The Company has six active special contracts :
6 (1) Micron Technology, Inc. , located in southeast Boise
7 (the same site as Micron FAB) , (2) the United States
8 Department of Energy' s Idaho National Laboratory, located
9 west of Idaho Falls; (3) the J R Simplot Company' s Don
10 Plant, located directly west of Pocatello; (4) the J R
11 Simplot Company' s Idaho Plant, located in Caldwell Idaho;
12 (5) Lamb Weston, Inc. , ("Lamb Weston") located in American
13 Falls; and (6) the Brisbie LLC' s ("Brisbie") enterprise
14 data center located in Kuna .
15 III . MICRON FAB ESA
16 Q. Will the Micron FAB ESA replace Micron' s
17 existing special contract noted above?
18 A. No. Idaho Power and Micron have operated under
19 a special contract arrangement for its research and
20 development and supporting operations since August 31,
21 1995 . Micron is expanding its Boise campus to include the
22 new memory manufacturing fab complex, the Micron FAB, that
23 will be served through distinct interconnection facilities
24 and Point of Delivery with a unique operating profile and
25 contract demand. The aggregate power requirement at the
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Idaho Power Company

1 Micron FAB will exceed 20 MW and necessitates the
2 establishment of this second special contract arrangement.
3 Q. Please provide an overview of the Micron FAB
4 ESA.
5 A. Consistent with the requirements of Schedule
6 19, the Company negotiated and executed an ESA to supply
7 retail electric service to the Micron FAB. As can be seen
8 in Attachment 1 to the Application, the ESA provides for a
9 long-term contract that becomes effective on the date of
10 the order issued in this case. It includes a contract
11 demand schedule that allows Micron to ramp up to 507 MW and
12 provides for a single block structure that incorporates
13 embedded cost-based pricing for capacity costs and marginal
14 cost-based pricing for energy requirements .
15 Q. Is the recovery of costs associated with the
16 initial construction of transmission and distribution
17 needed to connect the Micron FAB with Idaho Power' s system
18 addressed in the ESA?
19 A. No. The cost recovery of the initial
20 construction for transmission and distribution facilities
21 needed to serve the Micron FAB - including the cost
22 associated with relocation of several existing facilities -
23 is provided for in separate Construction and Procurement
24 Agreements . Those agreements are provided as Attachments 3
25 and 4 to the Application, respectively. Mr. Ellsworth' s
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Idaho Power Company

1 direct testimony provides an overview of the types of
2 upgrades necessary to interconnect the Micron FAB.
3 Consistent with other primary-service level
4 customers, Idaho Power will retain ownership of the newly
5 constructed distribution substation and transmission feeds
6 into that station, which will include responsibility for
7 the ongoing operating and maintenance costs up to the Point
8 of Delivery ("POD") at 34 . 5 kilovolts ("kV") , while Micron
9 will be required to install, own, and maintain all
10 distribution facilities downstream from the POD.
11 Q. What were the Company' s objectives when it
12 negotiated the Micron FAB ESA?
13 A. There were four primary goals : (1) develop
14 rates that reasonably assign and collect the costs to serve
15 the Micron FAB; (2) mitigate the rate impact on existing
16 customers by developing a rate structure that includes a
17 marginal cost-based price element for an initial term of
18 the ESA; (3) provide a means to quantify known and
19 measurable amounts of additional load for planning
20 purposes; and (4) include adequate customer safeguards to
21 mitigate against unforeseen variances between actual load
22 and what was relied on for planning purposes .
23 Q. How does the ESA mitigate the rate impact on
24 existing customers through its proposed rate structure?
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Idaho Power Company

1 A. The proposed structure provides for all energy
2 to be priced at a marginal cost-based energy charge. This
3 provision is important to recognize that the variable costs
4 associated with serving a new large load of this magnitude
5 will be met with marginal resources, and therefore a
6 marginal cost-based energy price is appropriate. Demand-
7 related charges are based on embedded costs and proposed to
8 be collected through a combination of contract demand and
9 billing demand charges, which each include take-or-pay
10 provisions .
11 Q. Is this structure similar to other recent
12 special contracts?
13 A. To an extent, yes . The Brisbie and Lamb Weston
14 ESAs both contain a "two-block" structure, where one block
15 incorporates a marginal cost-based energy price . The
16 difference for those agreements is the first 20 MW of load
17 service is priced at fully embedded costs - both demand and
18 energy.
19 Q. Why did the Company propose a different
20 structure for the Micron FAB than the recently approved
21 Brisbie and Lamb Weston ESAs?
22 A. Historically, the Company has presented a two-
23 block structure under which the first block of load, up to
24 the special contract threshold, is priced at fully embedded
25 rates in recognition that had the special contract customer
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Idaho Power Company

1 limited its load to less than 20 MW, it would have been
2 entitled to published tariff rates, which are priced on a
3 fully embedded basis .
4 In the case of Lamb Weston, this structure was
5 appropriate because Lamb Weston was an existing Schedule 19
6 customer whose energy requirements were changing because of
7 the customer expanding its operations and anticipated to
8 exceed 20 MW. However, until the customer' s aggregate power
9 requirement exceeded that threshold, it remained eligible
10 for service under Schedule 19 . A similar rationale existed
11 when the Company initiated special contract discussions
12 with Brisbie . In recognition that Brisbie was a new
13 customer locating in Idaho Power' s service area and Idaho
14 Power was generally resource sufficient at that time, Idaho
15 Power proposed a two-block structure be applied in that
16 case .
17 Different circumstances exist for the Micron FAB.
18 First, Micron already takes service from Idaho Power under
19 its existing ESA which is priced at fully embedded costs .
20 While the Micron FAB will take service at a different
21 voltage, necessitating a distinct POD and ESA, the entire
22 load is incremental to the existing site that is already
23 priced on an embedded basis . Further, at the time Idaho
24 Power and Micron started discussions around providing
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Idaho Power Company

1 service to the Micron FAB, Idaho Power had identified it
2 was no longer resource sufficient .
3 Q. Given the magnitude of Micron' s load, how did
4 you validate pricing demand on an embedded cost basis was
5 appropriate?
6 A. As more fully explained in Mr. Anderson' s
7 direct testimony, Idaho Power conducted a no-harm analysis
8 to validate whether pricing the Micron FAB load on an
9 embedded basis would result in harm to other customers . The
10 analysis demonstrated that under the proposed construct,
11 other customers would not be unduly harmed, and therefore,
12 the Company proceeded with proposing embedded pricing for
13 the demand-related components .
14 Q. How does the Micron FAB ESA provide a means to
15 quantify known and measurable amounts of additional load
16 for resource planning purposes?
17 A. In recognition that Micron has requested and
18 Idaho Power has agreed to make available initial levels of
19 Contract Demand, whether utilized or not, based on Micron' s
20 load ramp projections, Section 5 of the ESA outlines
21 Contract Demand and Minimum Monthly Billing Demand levels .
22 The contract includes stringent terms intended to limit
23 Micron" s ability to request changes to those levels, which
24 is necessary given how far in advance Idaho Power initiates
25 resource procurements . Specifically, Micron is unable to
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Idaho Power Company

1 make any changes to contract and minimum billing demand
2 levels for 2026 and 2027 and was required to notify Idaho
3 Power of changes to 2028 by January 1, 2025 . Going forward,
4 if Micron notifies Idaho Power of a change to 2029 or 2030
5 before January 1, 2026, limited changes can be
6 incorporated.
7 Q. Please describe what safeguards were
8 negotiated to mitigate impacts to Idaho Power' s other
9 customers .
10 A. Idaho Power negotiated robust customer
11 protections and the Micron ESA includes the strongest
12 customer protections the Company has ever implemented for a
13 special contract. Deliberate steps were taken to mitigate
14 risks, including: (1) minimum monthly billing demand and
15 contract demands - commonly referred to as take-or-pay
16 provisions; (2) rigorous credit support requirements; and
17 (3) termination payment provisions .
18 Q. Please explain how the contract and minimum
19 billing demand provisions provide other retail customers
20 with protections?
21 A. As I previously explained, through the
22 contract negotiations Micron provided its anticipated load
23 ramp and that load ramp has been incorporated into resource
24 planning decisions . If Idaho Power and Micron had not
25 negotiated the take-or-pay provisions, other customers
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Idaho Power Company

1 could be exposed to the risk associated with a delay in
2 Micron" s load or the load not materializing at all . Given
3 Idaho Power is generally building due to summer resource
4 deficiencies, the minimum billing demand has been set equal
5 to the forecasted summer load for June through September
6 each year, however it is effective June 1 of each year.
7 This ensures that, to the extent Micron' s summer load
8 expectations contributed to a resource deficiency and
9 ultimately a resource procurement, Micron will contribute
10 revenue to cover its share of those incremental resources -
11 this is in addition to its share of existing system
12 resources .
13 Q. Please explain how the credit requirements
14 provide other retail customers with protections?
15 A. The ESA required Micron Technology, Inc. , to
16 deliver a guaranty within ten (10) business days after the
17 ESA was executed. If at any time the credit rating of
18 Micron Technology, Inc . , is downgraded such that it is no
19 longer a Creditworthy Entity, Idaho Power may deliver
20 notice thereof to Micron, and within ten (10) business
21 days, Micron must deliver replacement credit support in the
22 form of a letter of credit or cash. The amount of the
23 replacement credit support is based on the net present
24 value of the remaining take-or-pay provisions . Under the
25 agreement, Idaho Power is entitled to draw upon the credit
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Idaho Power Company

1 support for any obligations under the agreement that have
2 been invoiced to Micron and are past due.
3 Q. Please explain how the termination payment
4 provision provides other retail customers with protections?
5 A. The ESA requires a minimum of 12 months'
6 notice of termination and provides that if the agreement is
7 terminated by Micron for any reason, then Micron must pay
8 Idaho Power a termination payment equal to the net present
9 value of the remaining take-or-pay provisions . This ensures
10 that Micron will continue to cover costs associated with
11 its share of infrastructure, regardless of whether they
12 ever take service from Idaho Power.
13 Q. Do you believe these protections provide
14 adequate protection to the Company and its other retail
15 customers?
16 A. Yes . The combination of the take-or-pay
17 elements and the credit and termination payment
18 requirements adequately protects the Company and its other
19 retail customers from the risk of default .
20 IV. PROPOSED ACCOUNTING TREATMENT
21 Q. What Power Cost Adjustment ("PCA") treatment
22 do you propose for the new ESA?
23 A. I propose that the costs of supplying energy
24 to the Micron FAB be included in the PCA and the energy-
25 related revenues under the ESA would be treated as a
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Idaho Power Company

1 surplus sale and an offset to power supply costs .
2 Accordingly, the Micron FAB energy sales would not be
3 included as Idaho retail sales used to calculate the sales-
4 based adjustment in the PCA and the annual PCA rates would
5 not be applicable to Micron FAB energy sales . This PCA
6 treatment is similar to the approach authorized for Brisbie
7 and Lamb Weston' s respective marginal cost-based energy
8 blocks .
9 V. CONCLUSION
10 Q. Is it your opinion that the approval of the
11 Micron ESA is in the public interest?
12 A. Yes . Idaho Power worked with Micron to develop
13 a pricing structure that addresses the current conditions
14 on Idaho Power' s system (i .e. , resource constraints and
15 increasing marginal cost of energy) and places the risk of
16 default on Micron and not the Company or its other retail
17 customers . The pricing structure is generally consistent
18 with past Commission-approved ESAs and will not unduly
19 impact other customers' rates .
20 Q. Does this conclude your direct testimony in
21 this case?
22 A. Yes, it does .
23
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Idaho Power Company

1 DECLARATION OF CONNIE G. ASCHENBRENNER
2 I, Connie G. Aschenbrenner, declare under
3 penalty of perjury under the laws of the state of Idaho:
4 1 . My name is Connie G. Aschenbrenner. I
5 am employed by Idaho Power Company as the Policy and
6 Pricing Director in the Regulatory Affairs Department.
7 2 . On behalf of Idaho Power, I present
8 this pre-filed direct testimony in this matter.
9 3 . To the best of my knowledge, my pre-
10 filed direct testimony is true and accurate.
11 I hereby declare that the above statement is
12 true to the best of my knowledge and belief, and that I
13 understand it is made for use as evidence before the Idaho
14 Public Utilities Commission and is subject to penalty for
15 perjury.
16 SIGNED this 30th day of April 2025, at Boise,
17 Idaho .
18
19 Signed:
20 CONNIE G. ASCHENBRENNER
21
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Idaho Power Company