20250509ICIP Comments.pdf

RECEIVED
May 09, 2 25
1 Peter J. Richardson IDAHO PUBLIC
515 N. 271h Street UTILITIES COMMIS& ON
2 Boise, Idaho 8702
3 [phone](office)
[phone] (mobile)
4 peter(&richardsdonadams.com
5
6 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
7
8 IN THE MATTER OF IDAHO POWER CASE No.: IPC-E-25-13
9 COMPANY'S APPLICATION FOR
AUTHORITY TO INCREASE ITS RATES
10 FOR ELECTRIC SERVICE TO RECOVER INDUSTRIAL CUSTOMERS OF IDAHO
I I COSTS ASSOCIATD WITH THE HELLS POWER'S COMMENTS IN OPPOSITION
CANYON COMPLEX RELICENSING AND REQUEST TO DENY IDAHO
12 PROJECT POWER'S APPLICATION TO RAISE
RATES FOR DEFERRED COSTS
13 ASSOCIATED WITH HELLS CANYON
14 RELICENSING
15 Pursuant to Order No. 36535 of the Idaho Public Utilities Commission(the
16 "Commission"), the Industrial Customers of Idaho Power(ICIP) by and through its attorney of
17
record, Peter J. Richardson, hereby requests the Commission deny Idaho Power Company's
18
19 ("Idaho Power" or the "Company") Application herein for the Company's violation of the
20 Commission's Rule of Procedure related to notices and its failure to assert essential facts upon
21 which the Commission could make a finding that the requested $30 million rate increase is in the
22 public interest. In sum, the ICIP assert that Idaho Power has failed to offer any evidence (or
23
even unsupported assertions) to the effect that the continued accumulation of AFUDC for Hells
24
25 Canyon is eroding its earnings, causing any financial hardship or is in the public interest and that
26
INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
PAGE- 1

I the Power Company has ignored the Commission's rules relative to public notice requirements.
2 The Commission should therefore deny the Application as not being in the public interest.
3
I.
4 BACKGROUND
5 LEGAL STANDARD
6 Idaho Power relies on Idaho Code Section 61-502A as the legal basis for its unusual
7 request for setting its rates to include costs associated with Construction Work in Progress
8 ("CWIP") which costs are accumulated through the process known as AFUDC or Accounting for
9
Funds Used During Construction. Until as recently as 2006, this Commission was prohibited
10
11 from setting rates or granting a return on property held for future use which is not currently used
12 and useful. That code section provides:
13 The Commission is hereby prohibited... from setting rates for any utility that
14 grants a return on... property held for future use and which is not currently used and
useful in providing utility service.
15
The statute's common-sense prohibition was clear in its provision that only when property is put
16
17 into service and becomes used and useful should ratepayers be required to pay the expenses
18 associated with that property. In 2006 the legislature amended Section 502A to provide an
19 exception to the general prohibition quoted above (which is still in the code) but only if the
20 Commission is able to make an"explicit finding that the public interest will be served thereby."
21
The legislature offered no guidance or definition instructing the Commission as to what an
22
23 "explicit finding" is or how an"explicit finding" is different from a run-of-the-mill general
24 "finding" which is ubiquitous in the PUC Code. It is legally significant that the "explicit
25 finding" requirement in Section 502A is unique in the Idaho PUC code. No other provision in
26
INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
PAGE-2

I the Idaho Code requires the Commission to make an "explicit finding" as opposed to simply
2 making a `finding' as to the public interest. Thus, the Legislature has clearly imposed a higher
3
standard on the Commission's "public interest" finding obligations in support of increasing rates
4
5 for property that is neither used nor useful in providing utility service to the public— such as the
6 yet-to-be-issued license for the Hells Canyon Project's dams on the Snake River.
7 II.
8 BACKGROUND
IDAHO POWER'S REQUESTED RATE INCREASE
9
Idaho Power initiated this case on April 9, 2025, by filing an application to increase its
10
I retail rates by approximately $30 million.' The Company's request for the additional $30
12 million in annual revenues is proposed in order for it to recover annual AFUDCZ accruals for the
13 ongoing relicensing costs associated with the Hells Canyon Complex ("HCC"). The Company is
14 already recovering $6.5 million in annual revenues for AFUDC associated with the HCC which
15
recovery was initially approved in Order Nos. 30722 and 32426 -- both of which originated in
16
17 general rate cases as opposed to this single-issue rate case. According to Idaho Power's
18 application in this matter, if the large rate increase is approved it will:
19 1. Reduce future rate increases.
20
21
22
23 Docket No. IPC-E-25-13, the precise dollar amount of the requested increase is$29,708,787 which will
24 be referred to herein as$30 million for brevity.
25 z AFUDC Accounting for Funds Used During Construction.
26
INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
PAGE- 3

1 2. Reduce total project costs that are ultimately included in rate base.
2 3. Improve cash flow.
3
4. Help maintain credit strength.
4
5 5. Help maintain access to competitive lending markets.3
6 It goes without saying that an annual thirty-million-dollar infusion of cash will be "helpful"to
7 the Company's bottom line. But nowhere in its filing does the Company allege that it is
8 necessary to maintain its financial health, cash flow or credit worthiness. The Company's
9
request to raise rates by four percent overall (six percent for the industrial and special contract
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11 customers) because of the "helpful" nature of realizing more money from its ratepayers is not
12 `explicitly in the public interest.'.4
13 III.
14 IDAHO POWER'S APPLICATION IS FATALLY FLAWED AND SHOULD BE DENIED
AND OR DISMISSED FOR MULTIPLE REASONS
15
A. The Company's Application Does Not Comply with the Commission's Rules of
16 Procedure Addressing Notice Requirements for a Request for a Rate Increase.
17 1. Rule 122: Failure of Notice to the Commission
18
Rule 122 of the Commission's Rules of Procedure requires Idaho Power to file a Notice of
19
20 Intent to File a General Rate Case. Despite its somewhat vague title's reference to a general rate
21 case, Rule 122 specifically provides that: This rule applies only to general rate increases. Note
22
23
24
25 s Idaho Power Application at pages 7—8.
26 a Id. at unpaginated attachment entitled"Calculation of Revenue Impact State of Idaho [PC-E-25-13.
INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
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I the significance of the reference to general rate increases and not to general rate cases. The
2 Company's application is, of course, a request for a general rate increase of six percent for
3
industrial and special contract customers and an overall four percent rate increase. The rule's
4
5
definition provides clarification that a general rate increase does not include such case as:
6 fuel cost adjustments, power cost adjustments, commodity or purchased power tracker
rate increase, emergency or other short-notice increases caused by disaster or weather-
7 related or other conditions unexpectedly increasing a utility's expense, rate increases
8
designed to recover governmentally imposed increases in costs ... such as changes in tax
laws . . .
9
The Company's application does not fall into any category of exceptions enumerated in Rule
10
122.
ll
12 Even under the most conservative reading of the rule, the Company's filing is, indeed, a
13 request for a general rate increase. The Application may not be considered a general rate case in
14 the traditional sense of the phrase, but there can be no doubt that it is a general rate increase that
15
does not fall under any of the exceptions to the rule. The Company's application, therefore,
16
17 should have been preceded by a sixty-day prior notice of intent to file—which sixty-day notice
18 was not made by Idaho Power. For this reason alone, the Company's Application should be
19 denied or returned pending compliance with the Commission's notice rules.
20 2. Rule 125: Failure of Notice to Customers
21
In a more serious failure to comply with the Commission's Notice Rules, the Company's
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23 notice to its customers of this thirty-million-dollar rate increase was not only buried (hidden) in
24 the Company's notice of the rate reduction associated with the annual PCA filing, but the
25 company's notice was misleading and a gross misrepresentation of its impact on ratepayers. In
26
INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
PAGE- 5

1 its notice of the permanent thirty-million-dollar rate increase the Company made the following
2
disclosures:
3
Idaho Power Requests Rate
4 Decrease in Annual PCA Filing
5 Idaho Power has filed the Power Cost Adjustment(PCA),the
final piece of its annual spring cost adjustments with the Idaho
Public Utilities Commission(IPUC) As a net result of the PCA,
6 the Fixed Cost Adjustment(FCA),and an additional filing
related to relicensing the Hells Canyon Complex(HCC).all
7 Idaho customers will see a price decrease.'
8 Instead of describing the Hells Canyon Complex case for what it is, to wit: a permanent thirty-
9 million-dollar rate increase, this requested rate increase becomes a mere "additional filing
10 related to relicensing the Hells Canyon Complex (HCC)" and in the same sentence without
I
qualification or clarification is the concluding assertion that "all Idaho Customers will see a
12
price decrease. "
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14 The Company's notice then proceed to further describe the proposed rate changes thusly:
15 [text resumes on following page]
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20 //
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24 5 gold text and extra-large font in original. Underscoring provided.
The unusual choice of the word"price"to describe this monopolist's rates implies a consensual
25 transaction rather than the reality that Idaho Power's ratepayers do not have a choice as to their electric supplier nor
26 do they have a choice as to the"rates" they pay.
INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
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I A typical Idaho residential customer using 950 kilowatthours
2 (kWh) per month will see an overall monthly
decrease of 8.26%, or approximately$ 9.97—the
3 combined impact of the following:
4 The PCA calls for a decrease of$ 94.8 million, or 5.89%, for
5 Idaho customers. The PCA is a cost- recovery tool that passes
on both the benefits and costs of supplying energy to Idaho
6 Power customers. This year' s PCA requests a monthly bill
decrease of$5.79 for the average Idaho residential customer.
7
The annual FCA, filed March 14, requested a decrease of
8 $40.66 million. The FCA applies only to residential and small
commercial customers and adjusts prices based on changes
9 in energy use per customer during the previous year. For the
to average Idaho residential customer, the FCA requested a
monthly bill decrease of$ 6.36.
11
The HCC relicensing request, filed March 14, proposed an
12 increase of$29.7 million to recover ongoing financing costs
associated with the project. For the average Idaho residential
13 customer, the request would result in a monthly bill increase
of $2.18.
14
15 If approved as filed, this combined price decrease will
take effect June 1 .7
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17 In the fourth paragraph, the Company's thirty-million-dollar rate increase application becomes
18 the "HCC relicensing request." Although the notice does observe that "the [HCC] request would
19 result in a monthly bill increase of$2.18." The admission of a"bill increase" is immediately
20
contradicted in the very next sentence which concludes in bold text and extra-large font that "this
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26 Bold text and extra large fonts all in original.
INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
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I combined price decrease will take effect June 1." Of course, "this" is not a"combined price
2 decrease." "This" is a permanent rate increase hidden in the annual PCA filing.
3
The confusion caused by the Company's combined notices is deliberate. Utility
4
5 ratemaking is inherently complex—even to those who regularly engage in cases before the
6 Commission. That said, blatant obfuscations of the ratemaking process and its end results are
7 particularly grievous. The Company's notice trickery is specifically prohibited in Commission
8 Rule 125(c)(3) which provides with respect to the content of rate change notices:
9
The information required by this rule is to be clearly identified, easily understood, and
to pertain only to the proposed rate change.
I I Idaho Power's notice of the HCC rate increase fails to meet even one of the requirements
12
contained in the Commission's rule: it is not clearly identified; it is not easily understood and it
13
14 does not pertain only to the proposed HCC rate increase. The rule isn't difficult to understand
15 and is easy to comply with.
16 The remedy for violations of the Commission's notice requirements is for the
17 Commission to return the application to the company "for incompleteness."s The Company
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should be held to at least a minimum standard of care regarding this important part of the
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20 ratemaking process and its Application should be returned "for incompleteness." This mild
21 remedy is not prejudicial to the Company. It would still be free to file once again for the
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INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
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I proposed rate increase, but this time it would likely be motivated to comply with both the letter
2 and the spirit of the Commission's notice requirements.
3
B. The Optional Nature of Idaho Power's Request Belies any Claim That it is in the
4 Public Interest to Impose this Proposed Rate Increase on the Company's
5
Ratepayers
6 Idaho Power's request for a rate increase for HCC relicensing is conditional. The Power
7 Company is willing to forgo this conditional rate increase if the PCA filing fails to reduce rates
8 by an equivalent amount of the proposed HCC rate increase. According to the Company's April
9
15, 2025 `Compliance Filing':
10
[T]he Company proposed to increase customer rates $29,708,787 to recover incremental
I I Hells Canyon Complex ("HCC") relicensing Allowance for Funds Used During
12 Construction ("AFUCD") amounts, provide that the decrease to rates associated with the
Power Cost Adjustment ("PCA"), was equal to, or greater.9
13
14 The Power Company is indifferent as to whether or not the PCA results in a rate decrease or a
15 rate increase, because:
16 Neither Idaho Power nor its shareholders receive any financial return from the PCA—
1 money collected is used to recover costs or credit benefits associate with annual
fluctuations in power costs.10
18
Because HCC AFUDC expenses are not `associated' [in any manner whatsoever] with annual
19
20
fluctuations in power costs, the Company's earnings and hence, need, for the HCC rate increase
21 are independent of the PCA's direction (either up or down). The conditional nature of its HCC
22
23
24
April 15,2025, Letter to Commission Secretary from Megan Goicoechea Allen, Idaho Power Corporate
25 Counsel.
10 Idaho Power Customer Notice.
26
INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
PAGE-9

I rate increase request demonstrates that it is superfluous to the Power Company's financial health.
2 Indeed, if Idaho Power really needed the rate increase it would have been highly imprudent to
3
have gambled the likelihood of its being granted on a random event (PCA rate direction) that is
4
5 completely unrelated to the Company's financial health. The Power Company is asking the
6 Commission to make a fantastic leap of logic, to wit: finding that the PCA is a rate decrease,
7 ergo the Company's rates should be increased for HCC AFUDC costs. The reverse would also
8 be true, according to the Company's `logic' to wit: a finding that the PCA is a rate increase, ergo
9
the Company's rates should not be increased for HCC AFUDC costs. Tying a rate increase
10
11 decision to a random event (e.g. a coin toss or PCA rate change direction) that is unrelated to the
12 Company's earnings is per se not in the public interest.
13 Not only are the two events (HCC rate increase and PCA rate change direction)
14 unrelated, but the Company has not made an offer of proof that the HCC rate increase is
15
necessary for the Company's financial health. The Company concedes that its HCC rate request
16
17 is conditional upon a random event unrelated to its earnings. It is therefore neither fair,just nor
18 reasonable for the Commission to impose that increase on the Company's ratepayers based on
19 that random event. Furthermore, and as noted earlier, the Commission's finding as to the public
20 interest of this proposed rate increase must meet a higher standard than is typical in the Idaho
21
PUC code. The Commission is required to make an"explicit" finding that the public interest
22
23 requires an increase in rates for the HCC AFUDC expenses.
24 Further evidence of the lack of need for the HCC AFUDC rate increase is the fact that the
25 Company currently has a Notice of Intent to File a General Rate case pending before the
26
INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
PAGE- 10

I Commission. The proper place to make a finding that the Company's earnings or cash flow are
2 such that a rate increase is necessary to pay for HCC AFUDC is in the context of the general rate
3
case that will be filed in just a matter of weeks. Idaho Power wasn't even sure if it wanted this
4
5 rate increase until the results of its PCA case were known. Such equivalence surely contradicts
6 any assertion that it is in the public interest to grant an immediate rate increase about which the
7 Power Company is ambivalent.
8 For all the above reasons the ICIP respectfully urge the Commission to issue its order
9
denying the Company's request for a rate increase to account for HCC AFUDC. Although the
10
I Company is free to refile this request, doing so would be redundant to the general rate case that
12 is currently in the wings. The most efficient process to address the company's request would be
13 to simply defer this issue to the pending general rate case for resolution along with all of the
14 other revenue requirement issues inherent in such a proceeding.
15
Dated this 9th day of May 2025.
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18 Peter J. Richardson
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INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
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1
I HEREBY CERTIFY that on the 9th day of May 2025, a true and correct copy of the within and
2 foregoing INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND
3 REQUEST TO DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS
ASSOCIATED WITH HELLS CANYON RELICENSING was served, pursuant to Commission Order
4 No. 34602, by electronic copy only, to:
5 Commission Secretary Megan Goicoechea Allen
6 Idaho Public Utilities Commission Donovan E. Walker
PO Box 83720 Matt Larkin
7 Boise, ID 83720-0074 Dockets
secreta�y��puc.idaho. ov_ Idaho Power Company
8 Boise, Idaho 83702
9 Monica Barrios-Sanches mgoicoecheallen i)idahopower.com
Commission Secretary dwalker c&idahopower.com
to Idaho Public Utilities Commission [e-mail]
I monica.bariossanches apuc.idsbo.Koy mlarkin&idahopower.com
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13 (9 /'�
14 By: Peter J. Richardson ISB # 3195
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INDUSTRIAL CUSTOMERS OF IDAHO POWER'S COMMENTS IN OPPOSITION AND REQUEST TO
27 DENY IDAHO POWER'S APPLICATION TO RAISE RATES FOR DEFERRED COSTS ASSOCIATED WITH
HELLS CANYON RELICENSING
28 IPC-E-25-13
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