20250509Staff Comments.pdf

RECEIVED
Friday, May 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 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 IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-25-13
AUTHORITY TO INCREASE ITS RATES )
FOR ELECTRIC SERVICE TO RECOVER )
COSTS ASSOCIATED WITH THE HELLS ) COMMENTS OF THE
CANYON COMPLEX RELICENSING ) COMMISSION STAFF
PROJECT )
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Chris Burdin, Deputy Attorney General,
submits the following comments.
BACKGROUND
On March 14, 2025, Idaho Power Company("Company") applied to the Commission
requesting an order authorizing an adjustment to customer rates of$29,708,787, effective June 1,
2025, to recover incremental Allowance for Funds Used During Construction ("AFUDC") costs
associated with the Hells Canyon Complex("HCC")relicensing project, contingent upon the
outcome of the Power Cost Adjustment("PCA")update to be filed April 15, 2025
("Application"). Application at 1-2.
The Company represents that the HCC consists of three hydroelectric projects, Brownlee,
Oxbow, and Hells Canyon, on the segment of the Snake River forming the border between Idaho
STAFF COMMENTS I MAY 9, 2025

and Oregon, approximately 90 miles northwest of Boise. Id. at 2. The Company states that the
HCC represents approximately 1,167 megawatts of nameplate generation capacity, which is
approximately 30 percent of the Company's total generating capacity. Id.
The Company represents that its efforts towards relicensing the HCC have spanned over
three decades,beginning in 1991. Id. at 2-3. The Company represents that it began incurring
relicensing costs in 1999, and that the Company records the accumulation of all costs associated
with the construction of an asset, including the cost of financing the construction expenditures, or
AFUDC, in Federal Energy Regulatory Commission("FERC") Account 107-Construction Work
in Progress ("CWIP"). Id. at 4. The Company states that once FERC issues a new license, the
Company can transfer accrued amounts to Electric Plant-in Service. Id.
The Company represents that Idaho Code § 61-502A allows for CWIP to be included in
rates if the Commission makes an"explicit finding that the public interest will be served
thereby." Id. at 5. The Company states that in Order Nos. 30722 and 32426, the Commission
authorized the Company to annually collect $6,520,122' in AFUDC associated with the HCC
relicensing project from the Company's Idaho jurisdictional customers. Id. The Company
represents that since 2022, the Company has recorded over$30 million annually in AFUDC. Id.
at 6.
The Company proposes to increase customer rates by $29,708,787 annually to recover
incremental HCC relicensing AFUDC amounts,provided that the anticipated upcoming decrease
to rates associated with the PCA to be filed on April 15, 2025, is equal to, or greater than the
amount it proposes to increase rates in this case. Id. at 7. The Company indicates that if the
PCA decrease is less than the proposed increase associated with AFUDC collections, the
Company will adjust its request in this case so that the net of the two proposals would result in a
net neutral rate impact to customers. Id.
The Company represents that an increase to the amount of AFUDC collections now will
reduce the total project costs ultimately included in rate base, thereby reducing future rate
increases. Id.
On April 15, 2025, the Company filed its annual PCA adjustment, Case No. IPC-E-25-
20, which if approved, will result in an overall revenue decrease of approximately $94.8 million.
'Revised to$6,537,444 by Commission Order No. 36042.
STAFF COMMENTS 2 MAY 9, 2025

Also on April 15, 2025, the Company submitted a compliance filing with updated tariffs
reflecting the proposed increase in this case.
STAFF ANALYSIS
Staff reviewed the Company's Application and its proposal to increase customer rates to
recover an additional $23 million annually in AFUDC costs associated with the HCC relicensing.
After applying the Net to Gross Tax Multiplier, the annual increase in the Company's revenue
would be $29,708,787. Staff evaluated the financial implications of the proposal for both the
Company and its customers, ensuring consistency with regulatory principles and determining
whether the request serves the public interest.
In 2024, the Company accrued approximately$34.5 million in AFUDC associated with
HCC relicensing. The current HCC AFUDC recovery of approximately $6.5 million is
significantly less than the annual accrual, which creates an escalation in the total amount that will
eventually be transferred to plant-in-service. Without an increase in AFUDC recovery now,
customers could see a significant increase in rates when the Company receives its new license
from FERC.
Recovering AFUDC at a time when customer rates will decrease in the PCA provides an
opportunity for the Company to recover a portion of the AFUDC costs while still providing
customers with rate relief. Allowing the Company to collect additional AFUDC related to the
relicensing of HCC at this time would significantly reduce the overall impact of a future rate
filing when the project is completed and incorporated into rate base.
Furthermore, because the HCC dams continue to produce electricity for the benefit of
current customers, it is reasonable that current customers contribute to the costs of relicensing.
Delaying AFUDC recovery until a new license is granted would shift these costs to future
customers who may not receive the same level of benefit. Staff considers the Company's
proposal to recover AFUDC costs associated with the HCC relicensing project reasonable,
consistent with regulatory principles, and in the public interest, and therefore recommends its
approval.
STAFF RECOMMENDATION
Staff recommends the Commission approve the Company's request to increase rates
$29,708,787 to offset AFUDC costs associated with the HCC relicensing project. Staff also
STAFF COMMENTS 3 MAY 9, 2025

recommends the Commission approve the tariffs filed with the Company's compliance filing on
April 15, 2025 with an effective date of June 1, 2025.
Respectfully submitted this 9th day of May 2025.
L, 't 'A .
Chris Burdin
Deputy Attorney General
Technical Staff. Ty Johnson
I:\Utility\UMISC\COMMENTS\IPC-E-25-13 Comments.docx
STAFF COMMENTS 4 MAY 9, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 1:07DAY OF MAY 2025,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-25-13, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
DONOVAN WALKER MATT LARKIN
MEGAN GOICOECHEA ALLEN IDAHO POWER COMPANY
IDAHO POWER COMPANY 1221 WEST IDAHO STREET(83702)
1221 WEST IDAHO STREET (83702) PO BOX 70
PO BOX 70 BOISE ID 83707
BOISE ID 83707 E-MAIL:
E-MAIL: mlarkinacidahopower.com
dwalkeraidahopower.com
mgoicoecheaallen�rc,idahopower.com
dockets Jdahopower.com
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P TRICIA JORD SECRETARY
CERTIFICATE OF SERVICE