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Home My WebLink About20250529Comments.pdf RECEIVED May 29, 2025 IDAHO PUBLIC UTILITIES COMMISSION JAYME B. SULLIVAN BOISE CITY ATTORNEY Ed Jewell ISB No. 10446 Jessica Harrison ISB No. 9768 Deputy City Attorneys BOISE CITY ATTORNEY'S OFFICE 150 N. Capitol Blvd. P.O. Box 500 Boise, ID 83701-0500 Telephone: (208) 608-7950 Facsimile: (208) 384-4454 Email: BoiseCityAttorneykcityofboise.org ei ewell(d,cityofboise.org jharrison&cityofboise.org Attorneys for Intervenor BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF Case No. IPC-E-25-03 IDAHO POWER COMPANY FOR APPROVAL OF THE NORTH VALMY POWER PLANT CITY OF BOISE CITY'S NATURAL GAS CONVERSION AGREEMENT FORMAL COMMENTS WITH NV ENERGY The City of Boise supports Idaho Power Company's (the "Company's") Conversion Agreement with NV Energy to transition Valmy Units I and 2 from coal to natural gas insofar as it enables a transition away from coal, increases reliability and affordability, provides for greater integration of renewable resources, and is aligned with the 2023 IRPAC plan to achieve the"Clean by 2045" goal. The City also supports cost recovery measures aimed at reducing Idaho Power ratepayer costs from this conversion. The City's support is tied to an exit by 2038, as forecasted, and assumes that the natural gas units will be dispatched to facilitate increased renewables on Idaho Power's system to help meet the Company's Clean by 2045 goals. CITY OF BOISE CITY'S FORMAL COMMENTS - 1 CONDITIONAL SUPPORT FOR TEMPORARY NATURAL GAS CONVERSION The City of Boise supports Idaho Power's exit from coal-fired generation at the North Valmy facility. This exit marks a meaningful step toward reducing carbon dioxide(CO2)emissions in the Company's generation portfolio and aligns with Boise's own climate goals. While the City of Boise generally does not support new investments in fossil fuel infrastructure, the proposed conversion of the Valmy units to natural gas is a potentially necessary interim step to maintain grid reliability and affordability while transitioning away from fossil fuel resources. The City gives its conditional support for this conversion only to the extent that it remains consistent with Idaho Power's 2045 clean energy goal and that it is explicitly identified as temporary. Although natural gas emits less CO2 than coal at the point of combustion, methane (CH4), the primary component of natural gas, is also a potent greenhouse gas with a global warming potential over 80 times that of CO2 on a per-molecule basis over a 20-year horizon. Methane emissions impact the atmosphere, increasing climate risks such as extreme weather, higher temperatures, and reduced snowpack. All of these impacts affect Boise residents, how they consume energy, and also Idaho Power's current and future energy generation, transmission, and distribution systems. These climate risks show up in rising insurance costs in the face of higher wildfire risk, snowmelt uncertainty that impacts hydroelectric capacity, and numerous other risk costs not currently fully modeled or accounted for. Thus, adding natural gas—even as a"bridge" fuel—has a climate and economic cost which must be considered. The City of Boise encourages Idaho Power to develop and share a planned timeline and strategy for fully exiting natural gas operations at Valmy Units I and 2 as part of achieving its Clean by 2045 goal. The City also encourages Idaho Power to continue to evaluate other portfolios, as detailed below. CITY OF BOISE CITY'S FORMAL COMMENTS - 2 EVALUATION OF ALTERNATIVE PORTFOLIOS WITH COMPARABLE COST AND RELIABILITY The City of Boise has a large residential customer base (-139,000 residential electric contracts in Boise in 2024), and as a municipality, is one of Idaho Power's largest customers. The City supports the use of least-cost, least-risk planning principles and notes there are other low- cost, low-risk portfolios available that also meet the aims of reliability, affordability, and risk mitigation. The Company has identified its Preferred Portfolio—which includes the conversion of both Valmy units to natural gas—as the most cost-effective under its planning models, which forms the basis of its proposal in this docket. However, several other portfolios in the 2023 Integrated Resource Plan(IRP) and in the Direct Testimony of Jared Ellsworth meet key criteria: a) Achieve Idaho Power's reliability standards, and b) Have comparable costs over the 20-year analysis period, especially when considering uncertainty. The following table summarizes a selection of these portfolios: e from NPV(2024— Preferred Portfolio Description 2043,$M) ($M) Source Preferred Portfolio(Valmy 1 &2) 9,746 — Table 1 (Ellsworth DI,p9) Valmy Unit 2 Only Conversion 9,795 +49 Table I (Ellsworth DI,p9) Valmy 1 &2+ 100%clean by 2045 9,808 +62 2023 IRP,p137 Full Exit from Valmy(No Conversion) 9,824 +78 Table I (Ellsworth DI,p9) Early Exit of Valmy Gas Units 903 +57 Table 2(Ellsworth DI,pl 1) (2030131) Demand Response Expansion 9,816 +70 Table 2(Ellsworth DI,p11) All of these portfolios fall within $80M or less of the preferred option—a relatively narrow difference over two decades, and well within the range of financial uncertainty due to fluctuating fuel prices, potential future carbon regulation, differences in demand growth CITY OF BOISE CITY'S FORMAL COMMENTS - 3 projections vs actual growth, climate risk, market price forecast uncertainty, and other variables that are impossible to predict with precision over the planning horizon. Given this, the City of Boise encourages consideration of cleaner portfolios more generally—such as those using demand response or earlier gas retirement timelinesto provide reliable service without further investment in natural gas or other fossil fuels, especially in the face of financial and other uncertainty. While the City of Boise advocates for cleaner portfolios more generally, the City also supports Idaho Power's request in this case for the Commission to approve the Conversion Agreement it entered with NV Energy to transition Valmy Units I and 2 from coal to natural gas with ratemaking treatment to follow in a future docket. Future ratemaking dockets will provide an opportunity to compare the forecasts that justified Idaho Power entering the Conversion Agreement with the actual costs incurred to determine the prudency of the investments, but ratemaking does not capture all the costs and uncertainties of fossil fuel investments. Because ratemaking does not capture all the costs and uncertainties of fossil fuel investments, resource decisions should be weighted to acknowledge the risk mitigation provided by clean, non-fueled renewable resources. CONCLUSION In sum, the City of Boise respectfully submits these comments to: reaffirm its support for a coal exit strategy and the lower COa emissions from exiting coal; give conditional support for the Conversion Agreement between Idaho Power and NV Energy to provide for the temporm gas conversion at Valmy Units I and 2 insofar as it provides greater renewable integration potential and helps meet the Company's Clean by 2045 goal; emphasize the importance of lifecycle climate impacts of methane; and urge Idaho Power and the Commission to continue considering viable, cost-comparable alternatives that reduce reliance on fossil fuels while meeting affordability and reliability standards and mitigating risk. CITY OF BOISE CITY'S FORMAL COMMENTS -4 Submitted this 29th day of May 2025 � t d Jewell, Deputy City Attorney CITY OF BOISE CITY'S FORMAL COMMENTS - 5 CERTIFICATE OF SERVICE I hereby certify that I have on this 29th day of May 2025, served the foregoing documents on all parties of record as follows: Monica Barrios-Sanchez ❑ U.S. Mail Commission Secretary ❑ Personal Delivery Idaho Public Utilities Commission ❑ Facsimile 11331 W. Chinden Blvd., Ste. 201-A 0 Electronic Boise, ID 83714 ❑ Other: secretary�&�puc.Idaho.gov Chris Burdin ❑ U.S. Mail Deputy Attorney General ❑ Personal Delivery Idaho Public Utilities Commission ❑ Facsimile 11331 W. Chinden Blvd., Ste. 201-A 0 Electronic Boise, ID 83714 ❑ Other: chris.burdinkpuc.Idaho.gov Donovan Walker ❑ U.S. Mail Megan Goicoechea Allen ❑ Personal Delivery Regulatory Dockets ❑ Facsimile Idaho Power Company 0 Electronic PO Box 70 ❑ Other: Boise, ID 83707 dwalker(&,idahopower.com mgoicoecheaallen(k idahopower.com dockets(&,idahopower.com Tim Tatum ❑ U.S. Mail Idaho Power Company ❑ Personal Delivery PO Box 70 ❑ Facsimile Boise, ID 83707 R1 Electronic ttatum&idahopower.com ❑ Other: Austin Rueschhoff ❑ U.S. Mail Thorvald A. Nelson ❑ Personal Delivery Austin W. Jensen ❑ Facsimile Kristine A.K. Roach Q Electronic Holland& Hart LLP ❑ Other: 555 17t' Street Suite 3200 Denver, CO 80202 darueschhoff khollandhart.com tnelson(d,hollandhart.com awj ensen(khollandhart.com karoach(&),hollandhart.com aclee&hollandhart.com CITY OF BOISE CITY'S FORMAL COMMENTS - 6 Eric L. Olsen ❑ U.S. Mail Echo Hawk& Olsen PLLC ❑ Personal Delivery PO Box 6119 ❑ Facsimile 505 Pershing Ave Suite 100 Q Electronic Pocatello, ID 83205 ❑ Other: elo(&,,echohawk.com Lance Kaufman, Ph.D. ❑ U.S. Mail 2623 NW Bluebell Place ❑ Personal Delivery Corvallis, OR 97330 ❑ Facsimile lance(d),ae isg insi hg t.com Q Electronic ❑ Other: Michelle Steel, Paralegal CITY OF BOISE CITY'S FORMAL COMMENTS - 7