20250508Staff Comments.pdf

RECEIVED
ERIKA K. MELANSON Thursday, May P 20
25
IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 11560
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF ROCKY MOUNTAIN POWER FOR ) CASE NO. PAC-E-25-01
APPROVAL OF THE DECOMMISSION AND )
SALE OF THE PARIS HYDROELECTRIC )
PROJECT GENERATING FACILITIES ) COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Erika K. Melanson, Deputy Attorney
General, submits the following comments.
BACKGROUND
On February 6, 2025, PacifiCorp, d/b/a Rocky Mountain Power("Company") applied to
the Commission requesting an order approving the decommissioning of the Paris Hydroelectric
Project generating facilities ("Paris Project") and determining that the decommissioning and
property disposition is in the public interest.
The Paris Project is a 715-kilowatt hydroelectric project located in Bear Lake County,
Idaho. The Company proposes the decommissioning of the Paris Project, removal of
infrastructure, and restoration of Paris Creek to its natural flow. This is initiated by the Paris
Creek Restoration Agreement between the Company and stakeholders. Application at 1.
STAFF COMMENTS 1 MAY 8, 2025

The Company states that it will decommission the Paris Project in exchange for a 15
cubic feet per second reduction in the Grace Hydroelectric Development's bypassed reach,
which will result in increased water available for generation at the Grace Development. Id. at 7.
The Company represents that at the conclusion of decommissioning, the Company will sell
approximately 31.7 acres of land and some valuable assets and donate an additional 4.3 acres for
public access to Paris Creek as part of the Paris Creek Restoration Agreement. Id. at 9.
STAFF ANALYSIS
Staff recommends that the Commission approve the Company's request to decommission
the Paris Project. The appropriate criteria to evaluate the decommissioning of the Paris Project is
contained in Idaho Code 61-328. It states that no electric utility shall merge, sell, lease, assign or
transfer any property used in the generation, transmission, and distribution or supply of electrical
power, except when authorized to do so by order of the Commission. Idaho Code 61-328(l).
The statute requests that before authorizing the transaction, the Commission shall find that:
(1) The transaction is consistent with the public interest;
(2) The cost of and rates for supplying service will not be increased by reason of such
transaction; and
(3) The applicant for such acquisition or transfer has the bona fide intent and financial
ability to operate and maintain said property in the public service. Idaho Code 61-
328(3)(a)-(c).
In compliance with the statute, Staff evaluated the decommissioning of the Paris Project
based on the three criteria. As a result, Staff believes that (1) the decommissioning of the Paris
Project is in the public interest; (2) the Company's customers should not see a rate increase as a
result of decommissioning the Paris Project; and (3) the decommissioning is initiated from an
agreement between the Company and stakeholders and that the stakeholders have sufficient
funding and a bona fide intent to maintain the property in service to the public.
As part of its review, Staff also verified that the Company received proper authorization
from FERC regarding its licenses related to the decommissioning of the Paris Project and that the
Company is using the proper accounting treatment.
STAFF COMMENTS 2 MAY 8, 2025

Evaluation Criteria
Public Interest
Staff evaluated the Company's request per Idaho Code 61-328. In the Application, the
Company described its participation in the Paris Creek Restoration Agreement with stakeholders
as the Bear River Hydroelectric Project Environmental Coordination Committee("ECC"). The
decommissioning of the Paris Project will provide multiple benefits to the public including that
(1) senior irrigation water rights will be returned to Paris Creek as a benefit for native fish; (2)
water for stock will not be impacted; and (3) 4.3 acres will be donated to a public entity for
public access to Paris Creek.
As mentioned in the Impact on Cost and Rates section below, with an updated financial
analysis, both options of either decommissioning or continued operation are relatively the same
cost to the Company. Although this will result in a minimal potential benefit for ratepayers, the
Company expects to sell its existing assets at the Paris Project, which will offset the Company's
expenses to decommission the Paris Project. Because of these reasons, Staff recommends the
Commission find decommissioning the Paris Project is in the public interest.
Impact on Cost and Rates
Staff reviewed the financial analysis that compares the net benefits of two alternatives:
decommissioning or continued operation of the Paris Project. Staff evaluated the financial
analysis with updated input data and concludes that:
(1) There isn't a major difference in net benefits between the two options after updating the
Company's analysis with the most recent information and by considering the revenue
from the sale of assets at the site; and
(2) The decommissioning of the Paris Project can be implemented without any additional
cost to customers.
The Company's financial analysis was developed in 2020. Staff determined that several
of the input variables were out-of-date, including the decommissioning date, the discount rate,
and the start year. Although the Company refused to update its analysis through discovery, Staff
was able to rework the analysis with updated information. The Company's analysis showed a
favorable result for decommissioning the Paris Project with a present value revenue requirement
("PVRR") of$1.706 million for the continued operation of the Paris Project and a PVRR of
STAFF COMMENTS 3 MAY 8, 2025

$1.419 million for decommissioning the Paris Project, representing a net benefit of$287
thousand.
Utilizing more current information, Staff calculated the decommissioning of the Project
to result in a net cost to customers of$26 thousand over 30 years when compared to the
continued operation of the Paris Project. However, the sale of assets associated with
decommissioning the Paris Project was not included in the analysis. When factoring the asset
sales into Staff s analysis, it should more than offset the additional cost of decommissioning the
Paris Project leaving the Company's customers indifferent to either alternative.
Intent and Financial Ability
Staff believes the overall intent of the agreement between the ECC and the Company is to
restore the Paris Creek watershed and stream flows to its natural state while not impacting the
Company and its customers by decommissioning the Paris Project. Once the Paris Project has
been decommissioned, Staff believes that the Paris Creek will return to the public and all assets
of the Paris Project will be sold or donated.
Even though the ECC is not the buyer of the transaction, the ECC will fulfill its
obligations and has the financial ability to ensure the intent will be performed. The ECC was
formed to provide oversight to improve water quality in the Bear River watershed to support
Bear River Cutthroat Trout. Efforts by the ECC have maintained annual funding of about $750
thousand dollars over the last 20 years)
FERC License
As part of the Company's plan to decommission the Paris Project and reduce the
minimum instream flow at the Grace development, the Company applied to FERC to (1)
surrender its conduit exemption order for the Paris Project; and (2) file an amendment to its Bear
River Project FERC license. FERC approved the Conduit Exemption Order on August 27, 2024,
and the Paris Project is still operating until all aspects of decommissioning are completed.
Response to Production Request No. 9. Additionally, the Company implemented its reduction of
"Bear River Hydroelectric Project FERC Project No.20 Bear River,Idaho,Off-site enhancement programs 20-
year review,"httl)s://www.hvdro.org/wp-content/uploads/2024/10/100824 A106 Considering Indirect Miti ation
in-Hydro-Project-Licensing-and-Compliance-Mark-Stenberg pdf.
STAFF COMMENTS 4 MAY 8, 2025

minimum instream flow at the Grace Development on September 9, 2024. Response to
Production Request No. 10.
Accounting Treatment with Decommissioning
The Company estimated the cost of decommissioning the Paris Project at $1.6 million.
Application at 7. The Company also stated that the assets will be sold, salvaged and donated at
the conclusion of the decommissioning. Id. at 9. In response to Staff s Production Request Nos.
1 and 2, the Company provided FERC accounts for the proposed accounting treatments (see
Table No. 1 below).
Table No. 1: FERC Accounts for the Proposed Accounting Treatments
FERC Account Description Debit Credit
Decommission Costs
108 Accumulated Depreciation xxx
131 Cash xxx
Asset Sale
131 Cash xxx xxx
101 Electric Plant In-service xxx
121 Non-Utility Property xxx
421.1 Gain on Disposition of Property xxx
Asset Donation
426.1 Donation xxx
101 Electric Plant In-service xxx
121 Non-Utility Property xxx
Staff reviewed the proposed accounting treatment and believes that Table No. 1 is a good
representation of how the Company should account for the costs and revenue due to the
decommissioning of the Paris Project. All transactions will be subject to a prudence review and
final decision on rate recovery in a future regulatory filing.
z This cost is different from the PVRR of$1.419 million stated earlier on page 4.The$1.6 million includes cost for
demolition of the Paris Project,removal of existing structures,environmental,and other indirect cost.
STAFF COMMENTS 5 MAY 8, 2025

STAFF RECOMMENDATION
Staff recommends that the Commission approve the decommissioning of the Paris Project
and determine that the decommissioning and property disposition is in the public interest.
Respectfully submitted this 8th day of May 2025.
Eri a K. Melanson
Deputy Attorney General
Technical Staff: Seungjae Lee
Leena Gilman
Kimberly Loskot
1:\Utility\UMISC\COMMENTS\PAC-E-25-01 Comments.docx
STAFF COMMENTS 6 MAY 8, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS ' DAY OF MAY 2025,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. PAC-E-25-01, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
MARK ALDER DATA REQUEST RESPONSE CENTER
IDAHO REGULATORY AFFAIRS MGR. E-MAIL ONLY:
ROCKY MOUNTAIN POWER datarequest(a�pacificorp.com
1407 WEST NORTH TEMPLE, STE 330
SALT LAKE CITY, UT 84116
E-MAIL: mark.alderkpacificorp.com
JOE DALLAS
ATTORNEY
ROCKY MOUNTAIN POWER
825 NE MULTNOMAH, STE 2000
PORTLAND, OR 97232
EMAIL: joseph.dallas(a�pacificorp.com
ti
PATRICIA JORDAN, ACRETARY
CERTIFICATE OF SERVICE