HomeMy WebLinkAbout20250530Direct Griffin.pdf RECEIVED
May 30, 2025
IDAHO PUBLIC
UTILITIES COMMISSION
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-25-16
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC SERVICE )
IN THE STATE OF IDAHO AND )
AUTHORITY TO IMPLEMENT CERTAIN )
MEASURES TO MITIGATE THE IMPACT )
OF REGULATORY LAG. )
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
SARAH GRIFFIN
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 Sarah Griffin. My business address
5 is 1221 West Idaho Street, Boise, Idaho 83702 . I am
6 employed by Idaho Power as Vice President of Human
7 Resources ("HR") .
8 Q. Please describe your educational background.
9 A. I currently hold a Bachelor of Art degree in
10 English from the University of Utah, and an Executive
11 Master of Business Administration degree from Boise State
12 University. I have been a member of the Society for Human
13 Resource Management since 1997 and have held both the
14 Professional and Senior Professional certifications,
15 although these are no longer active. I was appointed to the
16 Idaho Personnel Commission in 2017 and the Idaho Workforce
17 Development Council in 2019 and have been reappointed to
18 both positions .
19 Q. Please describe your work experience with
20 Idaho Power Company.
21 A. I possess nearly 30 years of experience
22 working in HR, with over 17 years of experience in the HR
23 department at Idaho Power. Between 1996 and 2007, I served
24 various HR roles at Delta Dental, Thoratec Corporation, and
25 NPS Pharmaceuticals, culminating in my role as Corporate HR
GRIFFIN, DI 1
Idaho Power Company
1 Manager at Boise Cascade. I began my employment with Idaho
2 Power in October 2007 as an HR Professional where my role
3 was to provide guidance to leaders in managing performance,
4 developing and delivering leader and employee training, and
5 conducting workplace investigations . Since my initial hire,
6 I have served in increasingly broad and expansive roles,
7 including HR Leader, HR Manager, and Director of HR,
8 ultimately moving into my current role of Vice President of
9 HR in October 2019 .
10 Q. What is the purpose of your testimony?
11 A. The purpose of my testimony is to provide
12 justification for the labor and total compensation costs
13 included in the Company' s test year. I will describe the
14 Company' s overall compensation philosophy and explain why
15 the level of compensation requested in this case is
16 necessary to provide safe, reliable, affordable electricity
17 to customers .
18 Q. How is the remainder of your testimony
19 organized?
20 A. My testimony consists of six sections that
21 address the current labor market, the components of Idaho
22 Power' s total compensation or "Total Rewards" package, and
23 how those components are determined. My testimony then
24 concludes with a summary of costs related to Total Rewards
25 included in the Company' s filing.
GRIFFIN, DI 2
Idaho Power Company
1 • Section I : Idaho Power' s Total Rewards
2 Philosophy
3 • Section II : Current Labor Market Challenges
4 • Section III : Base Wage Benchmarking
5 • Section IV: Incentive Compensation
6 • Section V: Benefits Benchmarking
7 • Section VI : Total Rewards Costs in 2025 Test
8 Year
9 I . IDAHO POWER' S TOTAL REWARDS PHILOSOPHY
10 Q. Please provide a general discussion of Idaho
11 Power' s Total Rewards philosophy.
12 A. Idaho Power' s Total Rewards philosophy is to
13 provide a balanced, competitive, and sustainable total
14 compensation and benefits package, ensuring it attracts and
15 retains high-quality employees and motivates performance
16 that delivers clear customer benefits at a fair and
17 reasonable cost. Maintaining a competitive Total Rewards
18 package allows the Company to recruit and retain a highly
19 skilled workforce that possesses a deep knowledge and
20 understanding of the complex energy business that builds
21 and becomes more valuable as employees gain more experience
22 over time. The competitiveness of Idaho Power' s Total
23 Rewards package also supports the Company' s intent to
24 maintain a flexible workforce that can easily adjust work
25 duties and assignments to meet changing demands and
GRIFFIN, DI 3
Idaho Power Company
1 operational needs . In support of this philosophy, the
2 Company monitors its Total Rewards package, and adjusts it
3 as needed to remain competitive with market compensation
4 trends .
5 Q. What are the components of Idaho Power' s Total
6 Rewards package?
7 A. The Total Rewards package is comprised of base
8 wages and "at-risk" incentive pay, as well as competitive
9 benefits programs including health and welfare, retirement
10 and other benefits .
11 Q. How often is the Company' s Total Rewards
12 package reviewed?
13 A. While certain components of the Company' s
14 Total Rewards package are reviewed annually, a
15 comprehensive benchmarking analysis that evaluates the
16 total cost of Idaho Power' s employee benefits (as a
17 percentage of pay) as compared to peer utility companies is
18 performed biennially. Table 1 below summarizes the
19 frequency of review for the various components of the
20 Company' s Total Rewards package, as well as the actions
21 that are taken based on each review. I will describe each
22 of these review processes in greater detail later in my
23 testimony.
GRIFFIN, DI 4
Idaho Power Company
1 Table 1
2 Total Rewards Review Frequency by Component
Total Rewards
Review Frequency Outcome
Component
Salary Structure Annually General Wage
Adjustment o
Benefits Programs Annually Program/rate
changes
Comprehensive Continually, targeting each Market
Compensation position every 5-7 years or adjustment, up or
Analysis less down
3
4 Q. How does Idaho Power analyze whether it is
5 providing market-competitive compensation and benefits?
6 A. Idaho Power' s compensation benchmarking
7 process evaluates positions on an ongoing basis, with the
8 goal of a comprehensive review occurring approximately
9 every 5-7 years, particularly for positions that have a
10 significant number of incumbents, to ensure that Idaho
11 Power maintains market-competitive compensation levels and
12 remains an employer of choice.
13 Q. What data sources does Idaho Power rely on for
14 these analyses?
15 A. The Company uses a variety of data sources in
16 the compensation benchmarking process . Non-exempt' trade
17 positions are typically benchmarked against intermountain
18 utility peer contract data. The Company also participates
19 in and purchases data from Willis Towers Watson' s ("WTW")
1 "Exempt" positions refer to non-hourly, salaried positions, while
"non-exempt" positions are paid on an hourly basis.
GRIFFIN, DI 5
Idaho Power Company
1 Energy Services Middle Management, Professional and Support
2 Compensation Survey to benchmark management, professional
3 exempt, office-based non-exempt, and other non-exempt
4 support roles .
5 Q. What is WTW and how does Idaho Power utilize
6 their survey data?
7 A. WTW is a nationally recognized HR consulting
8 firm, and the Energy Services Middle Management,
9 Professional and Support Compensation Survey is the most
10 widely used salary survey in the utility industry. WTW also
11 provides a biennial review of the cost to Idaho Power of
12 providing benefits (as a percentage of pay) compared to the
13 corresponding costs incurred by a peer group of "Energy
14 Services" companies . Benefits reviewed and benchmarked
15 include health, retirement, and other services, including
16 time off and disability programs . The Company utilizes
17 WTW' s Benefits Online survey data and benchmarking
18 information from Idaho Power' s benefits consulting firm,
19 IMA, when reviewing benefit programs and cost.
20 Q. How does the Company use the Total Rewards
21 benchmarking information to adjust employee compensation
22 and benefit offerings?
23 A. The Company uses the Total Rewards
24 benchmarking information as the basis for decision-making
25 regarding salary structure adjustments, compensation grade
GRIFFIN, DI 6
Idaho Power Company
1 levels and appropriate benefit levels, with the goal of
2 aligning the overall employee total compensation with the
3 market .
4 Q. Does the Company believe that the benchmarking
5 review process for Total Rewards is an effective method for
6 establishing its compensation and benefit levels?
7 A. Yes . The Company believes the Total Rewards
8 benchmarking review process is a critical and effective
9 tool for aligning its compensation and benefit levels with
10 its industry peers . This process helps ensure that the
11 Company' s offerings remain competitive, support employee
12 recruitment and retention, and result in labor costs that
13 are reasonable and appropriate for inclusion in customer
14 rates .
15 II . CURRENT LABOR MARKET CHALLENGES
16 Q. Please generally describe how the labor market
17 has changed since the Company filed its last general rate
18 case ("GRC") in 2023 .
19 A. The electric utility industry is changing at
20 a rapid pace, and along with it so are the needs and
21 expectations of Idaho Power' s employees . Idaho Power' s
22 compensation and benefits program has generally been
23 effective in recruiting and retaining talent. However, with
24 the changing expectations of the workforce during and post-
25 COVID pertaining to remote work, combined with the
GRIFFIN, DI 7
Idaho Power Company
1 escalation of housing costs in Idaho during the past five
2 years, this has become more difficult, particularly for
3 employees with specialized or high-demand skills .
4 Considering these challenges, ensuring the Company offers a
5 competitive Total Rewards package is increasingly important
6 in order to attract and retain a high-quality workforce
7 that can serve the needs of customers .
8 Q. What factors have contributed to current labor
9 market challenges?
10 A. Although candidate quality and volume have
11 improved for many positions in the years following the
12 COVID-19 pandemic, labor market challenges persist. The
13 widespread availability of fully remote work and the rising
14 cost of housing in Idaho have made it more difficult to
15 attract candidates for certain locations and specialized
16 roles .
17 While the Company' s overall voluntary turnover rate
18 is relatively low at 2 . 44 percent (excluding retirements)
19 as of December 31, 2024, voluntary turnover in the 0-5
20 years of service category is significantly higher at 4 . 77
21 percent for the same period. Idaho Power is also competing
22 with many companies in the northwest, where the significant
23 growth in demand for energy has created a highly
24 competitive environment for certain skill sets .
25 Additionally, there are new technologies along with the
GRIFFIN, DI 8
Idaho Power Company
1 impacts of wildfire that have created additional demand and
2 competition for the skills and expertise required to meet
3 these challenges .
4 Q. What are the current workforce demographics of
5 Idaho Power and how does this impact retention?
6 A. The demographic make-up of the Company has
7 changed significantly in the last ten years, where Idaho
8 Power has lost a large proportion of long-term talent and
9 expertise to retirement. The Company currently has 31
10 percent of employees eligible to retire in the next five
11 years and more than half of the employee population has
12 less than ten years of service. This makes it very critical
13 that the Company can attract and retain talent that can
14 learn and grow with the organization as Idaho Power
15 navigates an increasingly complex energy landscape . Given
16 the forecasted growth over the next five years, Idaho Power
17 is expected to complete an unprecedented number of capital
18 projects—creating valuable opportunities for employees to
19 apply their skills and expand their knowledge of the
20 Company' s system—making them key contributors to long-term
21 workforce continuity. These projects span across the
22 organization including power generation, high-voltage
23 transmission, distribution to customers, technology system
24 implementations that support the grid and serve customers,
25 and critical cybersecurity and wildfire mitigation systems
GRIFFIN, DI 9
Idaho Power Company
I and programs . It is also vital that Idaho Power has top
2 talent for all the support functions that ensure the
3 Company is able to effectively serve customers while
4 executing on these critical large-scale projects .
5 Q. How does the broader housing market affect
6 employee recruitment and retention at Idaho Power?
7 A. According to the most recent House Price Index
8 ("HPI") Quarterly Report (Q4 2024) issued by the Federal
9 Housing Financing Agency ("FHFA") , Idaho is still among the
10 top states in the nation in the five-year increase in
11 housing prices, as demonstrated in Figure 1 below. These
12 elevated prices present barriers for both attracting new
13 employees from out of state and retaining existing
14 employees, particularly younger workers looking to purchase
15 their first home or accommodate growing families . Without
16 affordable options, employees may explore job opportunities
17 in regions with more accessible housing markets, putting
18 Idaho Power at risk of talent loss .
19
GRIFFIN, DI 10
Idaho Power Company
1 Figure 1
2 Home Price Index Percent Changes, Q4 2024, 5-year
3 appreciation rates
FHFA Home Price Index
Percent Change in Housing Prices
Boise 62.94%
Idaho 14 71.94%
Mountain Division 59.63%
USA 57.13%
0% 10% 20% 30% 40% 50% 60% 70% 80%
4
5 Q. How have rising housing costs influenced Idaho
6 Power' s overall recruiting efforts?
7 A. For candidates external to Idaho Power' s
8 service area, housing costs serve as a key decision point
9 when evaluating whether to accept a job offer. While Idaho
10 Power prefers to and focuses on hiring locally, many
11 specialized positions require broader recruiting sources,
12 especially in light of the recruiting challenges detailed
13 previously in my testimony. Where Idaho Power was
14 historically able to market Idaho as high quality-of-life
15 and low cost-of-living compared to other states, the
16 historic increase in housing costs has degraded the
17 Company' s ability to market Idaho as low cost-of-living.
18 This challenge is especially pronounced in the Company' s
GRIFFIN, DI 11
Idaho Power Company
1 more rural and resort-area locations, where affordable
2 housing options are scarce. In these areas, it is critical
3 for employees to reside nearby in order to respond promptly
4 to emergencies and maintain reliable service.
5 Q. How have changes in the electric utility
6 industry resulted in the need to hire and retain
7 specialized talent since the Company' s last general rate
8 case?
9 A. The continued development of new technologies
10 that are critical to meeting customers' energy needs,
11 particularly given the residential and industrial growth in
12 Idaho, make it challenging to find talent given the
13 competition in the Western United States . Battery Energy
14 Storage Systems are one example of the diverse technologies
15 that help ensure reliable and affordable power for
16 customers . These systems require a unique mix of technical
17 skills that are challenging to find and there is steep
18 competition for talent. Additionally, the demand for
19 experienced electricians has skyrocketed given the Micron
20 expansion project and other large projects where
21 specialized expertise is critical . Furthermore, wildfire
22 mitigation has become an increasingly critical aspect of
23 Idaho Power' s business to protect the system and customers
24 alike . The knowledge and expertise that is required to
25 effectively manage this risk is critical to Idaho Power' s
GRIFFIN, DI 12
Idaho Power Company
1 business and is in short supply. Retaining current talent
2 in this area and being able to recruit additional qualified
3 staff has been an area of increased focus since the last
4 rate case.
5 Q. How has Idaho Power responded to the changing
6 labor market and the challenges it presents?
7 A. Considering these challenges, Idaho Power has
8 modified its recruiting approach with the ultimate goal of
9 attracting and retaining a talented workforce while keeping
10 costs low for customers . First, where Idaho Power formerly
11 was able to rely solely on local sources for its job
12 postings, the Company has expanded its use of nationwide
13 job boards to help promote and target qualified candidates
14 and has expanded its candidate outreach using resume
15 databases and other digital platforms . Additionally, in the
16 post-pandemic era in which many job seekers prioritize
17 remote work opportunities, Idaho Power began offering
18 hybrid work options for qualified positions . Further, due
19 to the difficulty in finding experienced candidates, Idaho
20 Power has increasingly focused on hiring at the entry level
21 and investing in employee training and development . This
22 makes the current experienced workforce even more critical
23 to retain long term so there can be sufficient knowledge
24 transfer and development of the skills and expertise of
25 this less experienced demographic.
GRIFFIN, DI 13
Idaho Power Company
1 Q. How do these challenges impact the Company' s
2 Total Rewards philosophy?
3 A. These labor market challenges reinforce the
4 importance of maintaining a competitive Total Rewards
5 philosophy. To attract and retain high-quality employees,
6 Idaho Power must offer a well-structured mix of
7 compensation, benefits, and retirement programs that meet
8 both immediate and long-term employee needs . A strong Total
9 Rewards package not only supports recruitment efforts, but
10 also plays a vital role in employee engagement and long-
11 term retention. This, in turn, helps the Company cost-
12 effectively maintain safe and reliable service to
13 customers . Each component of Idaho Power' s Total Rewards
14 offering—Base Wages, Incentive Pay, and Benefits—is
15 discussed in detail in Sections III through V of my
16 testimony.
17 III . BASE WAGE BENCHMARKING
18 Q. What are base wages?
19 A. Base wages represent the fixed portion of
20 compensation provided to employees under Idaho Power' s
21 Total Rewards program. Non-exempt employees receive hourly
22 wages for hours worked, while exempt employees are paid an
23 annual salary.
24 Q. How does Idaho Power determine the market-
25 based pay structure for a job?
GRIFFIN, DI 14
Idaho Power Company
1 A. When a new position is established—or an
2 existing one reviewed—Idaho Power sets base compensation
3 using peer utility wage data drawn from salary surveys and
4 union contracts . Comparable internal positions are also
5 considered. The Company evaluates at least three years of
6 market data to ensure consistency with broader compensation
7 trends and to avoid overreacting to short-term
8 fluctuations .
9 Idaho Power also evaluates education and experience
10 requirements, physical demands, and key competencies for
11 each role. This comprehensive process ensures job
12 descriptions remain accurate, competitive, and aligned with
13 industry and safety standards .
14 Q. Please describe the standard the Company uses
15 to set base wages .
16 A. Idaho Power uses a grade-and-step system,
17 where the top step (Step 13) in each grade is set to
18 approximately match the market median for similar
19 positions . Targeting the market median is a conservative,
20 industry-standard approach that supports cost control while
21 ensuring compensation remains competitive.
22 Q. How does Idaho Power ensure its base wages do
23 not exceed the market median over time?
24 A. Each year, Idaho Power evaluates external wage
25 survey data, peer utility labor contracts, and inflationary
GRIFFIN, DI 15
Idaho Power Company
1 indicators—such as the Consumer Price Index ("CPI")—to
2 determine a General Wage Adjustment ("GWA") . This
3 recommendation is provided to the Board of Directors to
4 ensure compensation remains market-competitive over time .
5 Q. What is the Company doing to ensure
6 evaluations price jobs appropriately to the market?
7 A. The Company has a job review process that
8 aims to review jobs at least every 5-7 years to ensure they
9 are in alignment with the market. This is in addition to
10 the practice of reviewing jobs when there are significant
11 changes in job responsibilities or market conditions
12 resulting in challenges for the Company in recruiting
13 and/or retaining the talent necessary to provide safe,
14 reliable, and affordable energy to customers .
15 Q. Please generally describe the current job
16 review process .
17 A. Positions are benchmarked using third-party
18 salary surveys—primarily those from Willis Towers Watson-
19 with an emphasis on energy sector data from comparably
20 sized and regulated utilities . When appropriate, Idaho
21 Power supplements this data with peer utility contracts and
22 relevant internal job matches . Job postings from similar
23 utilities are also reviewed for context .
24 Q. Has the Company made progress in reviewing all
25 jobs at Idaho Power using this job review process?
GRIFFIN, DI 16
Idaho Power Company
1 A. Yes . The Company has made significant progress
2 on job evaluations in the last two years, with a focus on
3 the jobs in the craft/trade job families . Figure 2 below
4 shows the number of jobs that have been reviewed since the
5 last rate case and the overall progress to date since
6 implementing this new process in 2017 .
7 Figure 2
8 Job Review Completion Progress
Job Review Completion Progress - Job Review Completion Progress -
2023 GRC 2025 GRC
17%
31% 3%
63%
1%
80%
9 ■Complete ■In Progress ■Remaining ■Complete ■In Progress ■Remaining
10 As of May 2025, there are 672 total distinct jobs in
11 the Company. Of those, reviews for 540 are complete, 18 are
12 in progress, and 114 remain.
13 Q. What changes have occurred as a result of the
14 Company' s broader job review?
15 A. As shown in Figure 3 below, the majority of
16 the jobs reviewed were on-market, indicating that Idaho
17 Power' s wage-setting process is functioning as intended.
18 For jobs that were found to be above market, employees are
GRIFFIN, DI 17
Idaho Power Company
1 placed into a reduction-in-grade program that brings them
2 into alignment with the lower rate of the new reduced grade
3 of the position. When positions are determined to be below
4 market, the incumbents are generally moved to the
5 equivalent step of the position' s new grade .
6 Figure 3
7 Comprehensive Job Review Results by Category
Job Review Results by Category
On Market
Below Market .
Above Market
0% 10% 20% 30% 40% 50% 60% 70%
8
9 Q. What has been the recent trend for wages and
10 salaries in the marketplace?
11 A. Data indicates that wages and salaries are
12 generally increasing in the marketplace. The Company
13 reviews several factors to determine appropriate increases
14 based on what is trending in the market, including salary
15 budget surveys, union contract negotiations, and cost-of-
16 living and economic factors .
GRIFFIN, DI 18
Idaho Power Company
1 Q. Has Idaho Power observed any recent trends in
2 salary budget surveys and union contract negotiations?
3 A. Yes . In recent years, salary budget surveys
4 have shown steady increases in merit and salary structure
5 projections . While early indications suggest a potential
6 softening in these trends, certain highly competitive and
7 specialized job categories continue to experience upward
8 pressure, as noted earlier in my testimony. Recent union
9 contract annual adjustments, as well as market adjustments
10 for many positions were negotiated at an all-time high,
11 with several peer utilities granting increases in the
12 double digits for certain roles . As shown in Table 2 below,
13 first year contract wage increases for lineman ranged from
14 8-19 percent.
15 Table 2
16 Peer Utility Wage Increases for Lineman
Northwest Peer Old Hourly % of
Utilities Rate 1-2 New Hourly Rate13 Increase
Avista $48.63 $55.39 13.90%
Northwestern $48.24 $51. 94 7.70%
NV Energy $52.38 $62.18 18.70%
Pacific Power $48.91 $56.03 14.60%
Rocky Mountain
$49.29 $54.40 10.40%
Power
17 17) All data collected from publicly available job postings or union contracts
18 2) Hourly rate effective final year of old union contract
19 3) Hourly rate effective first year of new union contract
20
21 Q. Have you observed any changes in cost-of-
22 living and economic factors impacting employee
23 compensation?
GRIFFIN, DI 19
Idaho Power Company
1 A. With respect to cost-of-living and economic
2 factors, CPI indicates inflation returning to more normal
3 levels in 2023 and 2024, as indicated in Table 3 below.
4 Table 3
5 Consumer Price Index, 2020-2024
Consumer Price Index - CPI-U
(12 mo. Change through 2020 2021 2022 2023 2024 Average
September)
US City Average 1.40% 5.4 0% 8.2 0% 3.7 0% 2.4% 4.20%
West (Includes AK, AZ, CA,
CO, HI, ID, MT, NV, NM, OR, 1. 60% 5.30% 8.30% 3. 90% 1.40% 4.10%
UT, WA, WY)
West - Size Class B/C (2.5 2.00% 5.70% 8.30% 3. 90% 1. 60% 4.30%
million or less)
Mountain Division (Includes
AZ, CO, ID, MT, NV, NM, UT, 1.80% 6.00% 9.60% 3.80% 1.40% 4.50%
WY)
6
7 Housing prices-especially in Idaho and Boise-remain
8 elevated over the five-year period, reinforcing the need
9 for market-aligned wages to recruit and retain qualified
10 employees . Table 4 below details the home price index
11 changes from 2020 to 2024 .
12 Table 4
13 Home Price Index, 2020-2024
Home Price Index 2019 2021 2022 2023 2024
National 5.10% 18.80% 17.70% 3.00% 5.70%
Mountain Division
5. 90% 25.50% 21.40% -2.10% 4. 60%
(AZ,CO,ID,MT,NV,NM,UT,WY)
Idaho 11.40% 37.10% 19.10% -4.10% 1.10%
Boise 13. 60% 41.10% 15.00% -9.50% 3.80%
Source: Federal Housing Finance Agency (12 Mo.
Change Through Q2 2024)
14
15 Q. What is the result of the Company' s general
16 wage benchmarking process considering these recent trends,
GRIFFIN, DI 20
Idaho Power Company
1 and how does this impact the base wage levels reflected in
2 the Company' s filing?
3 A. Idaho Power adjusts base wages through two key
4 mechanisms : annual GWAs informed by market conditions, and
5 a structured, comprehensive job review process . Together,
6 these ensure that compensation levels remain aligned with
7 industry benchmarks and support the Company' s ability to
8 recruit and retain qualified employees while managing labor
9 costs prudently on behalf of customers .
10 The annual GWA process allows the Company to respond
11 to broad economic trends, such as inflation and shifts in
12 peer utility pay structures . In parallel, the job-specific
13 review process ensures individual roles remain
14 competitively positioned within the market based on the
15 duties performed and the skills required. Most positions
16 reviewed in recent years were found to be consistent with
17 market levels, confirming that the Company' s wage-setting
18 methodology remains effective.
19 As shown in Figure 3, a relatively small number of
20 positions required adjustment—either upward or downward-
21 based on market data. The number of wage increases was
22 nearly equal to the number of decreases, further
23 demonstrating that the Company' s compensation structure is
24 balanced, evidence-based, and not biased toward unwarranted
25 wage escalation.
GRIFFIN, DI 21
Idaho Power Company
1 Combined, these processes contribute to Idaho
2 Power' s 2025 test year forecast of $144 . 8 million in
3 operations and maintenance ("O&M") base wage costs . Company
4 witness Mr. Matthew Larkin discusses the derivation of the
5 test year 0&M labor in greater detail in his testimony.
6 IV. INCENTIVE COMPENSATION
7 Q. What is incentive pay?
8 A. Incentive pay is an "at-risk" part of Idaho
9 Power' s Total Rewards package that is awarded based on
10 performance goals established by the Compensation Committee
11 of the Company' s Board of Directors . Unlike base pay, which
12 is guaranteed, incentive pay will not be paid unless the
13 Company' s performance meets or exceeds predetermined
14 metrics .
15 Q. How is Idaho Power' s short-term incentive pay
16 designed?
17 A. Idaho Power' s short-term incentive plan
18 consists of three components : 1) an electrical network
19 reliability goal, 2) a customer satisfaction goal, and 3) a
20 profit-sharing goal based on net income. The intent of the
21 plan is to focus on key areas where employees can have an
22 impact .
23 Q. Please generally describe the short-term
24 incentive metrics .
GRIFFIN, DI 22
Idaho Power Company
1 A. The three metrics are intended to motivate
2 employee performance in ways that positively impact
3 customers . The network reliability goal considers the
4 frequency and duration of customer outages . The customer
5 satisfaction goal is based on the 12-month average of the
6 customer relationship index ("CRI") , which details the
7 Company' s performance through the eyes of the customer. The
8 CRI consists of five specific questions asked of Idaho
9 Power' s customers by an independent survey company and
10 addresses issues such as overall satisfaction, quality,
11 value, advocacy, and loyalty. The profit-sharing component
12 is based on achievement against financial targets,
13 motivating employees to work toward the financial health of
14 Idaho Power, which is necessary to provide safe, reliable,
15 and affordable service.
16 Each component has an identified threshold, target,
17 and maximum, or in other words, a low, medium, and high
18 level of payout based on actual results compared to
19 predetermined metrics . The payout levels are set each year
20 by the Board of Directors to ensure they continue to
21 stretch employee performance in service of customers .
22 Q. Which components of the Company' s short-term
23 incentive plan are included in the Company' s 2025 test
24 year?
GRIFFIN, DI 23
Idaho Power Company
1 A. Consistent with prior Commission direction, 2
2 Idaho Power has only included the components of short-term
3 incentive pay that the Commission has determined are
4 directly related to identifiable customer benefits, which
5 in this case are network reliability and customer
6 satisfaction. These components are included in the test
7 year at the 2 percent target (medium) incentive level for
8 each component. Idaho Power has excluded any costs related
9 to the profit-sharing component.
10 Q. Has Idaho Power excluded any other components
11 of its short-term incentive pay from its request in this
12 case?
13 A. Yes . Idaho Power has excluded executive short-
14 term incentive pay. This is consistent with Commission
15 treatment of these costs in prior ratemaking proceedings .
16 Q. In addition to the short-term incentive
17 program, does Idaho Power offer any long-term incentive
18 compensation?
19 A. Yes . Idaho Power offers a long-term incentive
20 ("LTI") compensation program for officers and senior
21 managers . The purpose of the LTI program is to align
22 executive decision-making with the Company' s long-term
23 strategic goals, including financial sustainability, risk
24 management, and capital investment execution. These awards
2 IPC-E-08-10, Order No. 30722 at 17.
GRIFFIN, DI 24
Idaho Power Company
1 are typically performance-based and vest over a multi-year
2 period, reinforcing accountability for long-term outcomes
3 rather than short-term gains .
4 LTI programs are a standard component of senior
5 leadership compensation across the utility industry,
6 particularly for companies managing long-duration capital
7 investments, operational risk, and grid modernization
8 initiatives . Consistent with the Settlement Stipulation in
9 the Company' s 2023 general rate case, Idaho Power has
10 excluded the financial performance-based component of LTI
11 compensation and included only the time-based vesting
12 portion in this case. The inclusion of the time-based
13 component of the LTI in the test year gives recognition to
14 the customer benefits of retaining skilled and experienced
15 executives and senior managers .
16 Q. What is the Company requesting in this case
17 with regard to incentive-related costs?
18 A. As discussed in Mr. Larkin' s testimony, the
19 2025 test year includes $11 . 9 million for customer
20 satisfaction and reliability-related incentive pay, and
21 $3 . 5 million for the time-based component of long-term
22 incentive compensation for officers and senior managers .
23 V. BENEFITS BENCHMARKING
24 Q. What is Idaho Power' s benefits strategy?
GRIFFIN, DI 25
Idaho Power Company
1 A. Idaho Power' s strategy is to offer a
2 comprehensive and cost-competitive package of health,
3 welfare, retirement, and insurance benefits . As with base
4 compensation and incentive pay, the Company' s benefits
5 program is designed to attract and retain qualified
6 employees at all career stages . In the current labor
7 environment, benefits that support long-term employment are
8 especially critical to maintaining workforce continuity.
9 Q. What are the major components of Idaho Power' s
10 benefits package?
11 A. The Company' s benefits package includes health
12 and welfare programs (medical, prescription, dental, and
13 vision) , other benefits (disability, life insurance, and
14 flexible time off) , and retirement plans .
15 Q. Does Idaho Power benchmark its total benefits
16 and compare overall benefit costs?
17 A. Yes . The Company monitors its benefit programs
18 on an ongoing basis to ensure the appropriate balance
19 between benefit cost and maintaining a competitive position
20 in the market .
21 Q. What is Idaho Power' s annual benefits
22 benchmark review process?
23 A. On an annual basis, Idaho Power utilizes
24 benchmarking data from WTW' s Benefits Online and the Health
25 Care Financial Report, IMA' s regional and national survey
GRIFFIN, DI 26
Idaho Power Company
I data, and peer utility contracts to address the Company' s
2 benefit plan' s overall cost, offerings, and market
3 competitiveness . For example, medical, dental, and vision
4 premiums are evaluated and generally adjusted each year.
5 Further, the medical plan' s cost-sharing balance target is
6 20 percent employee and 80 percent employer (which is
7 competitive with peer utilities) and annual rates are
8 evaluated and adjusted to align with this target
9 percentage. The results of this review are presented
10 annually to the Board of Directors' Compensation Committee
11 and are generally implemented the following year.
12 Q. How does Idaho Power benchmark longer-term
13 benefits?
14 A. Idaho Power participates biennially in WTW' s
15 Energy Services "BENVAL" study, which compares the overall
16 value of the Company' s benefits against similarly sized
17 utilities . BENVAL evaluates benefit costs across all major
18 categories and expresses results as a percentage of pay to
19 provide a consistent basis for comparison.
20 Q. What is Idaho Power' s peer group in the BENVAL
21 study?
22 A. Idaho Power' s 2023 BENVAL peer group consists
23 of approximately 37 similarly situated energy services
24 companies across the nation, as well as a subset of utility
25 companies of similar size.
GRIFFIN, DI 27
Idaho Power Company
1 Q. According to the most recent BENVAL study, how
2 do Idaho Power' s total benefit costs compare to its energy
3 peer group?
4 A. As shown in Figure 4 below, the value of Idaho
5 Power' s total benefits package—including health,
6 retirement, and other benefits—is 39 . 4 percent of pay,
7 compared to 40 . 1 percent for the Company' s peer group in
8 the most recent BENVAL study. This reflects a relatively
9 equivalent total benefit ratio.
10 It is important to note that Idaho Power manages its
11 benefits package as a whole, rather than focusing on
12 individual components in isolation. The BENVAL survey
13 provides a standardized tool that enables the Company to
14 compare the total value of its benefit offerings—expressed
15 as a percentage of pay—against similarly situated
16 utilities . While individual benefit components may differ
17 among peers, Idaho Power' s overall benefit cost remains
18 aligned with the market.
19 As illustrated in the chart, Idaho Power' s total
20 benefit costs are generally consistent with those of the
21 broader energy industry.
22
GRIFFIN, DI 28
Idaho Power Company
1 Figure 4
2 Composite BENVAL Results : 2019, 2021, 2023
Benefit Costs as a Percentage of Pay
41.0%
40.0%
39.0%
38.0%
37.0%
36.0%
35.0%
34.0%
33.0%
32.0%
2019 2021 2023
■IPC ■Energy
3
4 Q. What benefit cost trends can be seen from the
5 recent BENVAL survey results?
6 A. A review of the data from the 2019, 2021, and
7 2023 studies shows that total benefit costs are rising
8 across the board. As indicated in the prior figure,
9 percentage of pay has increased between surveys from 2019,
10 2021, and 2023 . These trends, coupled with the increase in
11 CPI and overall wages discussed earlier in my testimony,
12 indicate that the costs of maintaining a market-competitive
13 benefits package are increasing over time.
14 Q. What has been the Company' s approach to
15 managing rising health and welfare care costs?
GRIFFIN, DI 29
Idaho Power Company
1 A. The Company continually evaluates industry
2 trends and actively partners with IMA and third-party
3 administrators to implement strategies that help manage
4 overall healthcare costs . These strategies include
5 optimizing prescription benefits and formularies, promoting
6 conservative care approaches, implementing case management
7 programs, reviewing medical policies, and expanding access
8 to telemedicine. Additionally, Idaho Power conducts ongoing
9 vendor evaluations to ensure it receives high-quality
10 service at the most competitive cost.
11 Q. Given the upward pressure on health and other
12 benefit costs, what is Idaho Power doing to ensure its
13 total benefit costs remain in line with the market?
14 A. The Company continues to benchmark its benefit
15 program offerings and associated costs on an annual basis
16 to ensure that its total benefits package remains
17 competitive with the market. This regular evaluation allows
18 Idaho Power to make informed adjustments that balance cost
19 control with the need to attract and retain a qualified
20 workforce .
21 Q. Are there any final conclusions that can be
22 drawn from the benefits benchmarking information you have
23 provided?
24 A. Yes . As demonstrated by the BENVAL results
25 included in my testimony, Idaho Power' s total benefits,
GRIFFIN, DI 30
Idaho Power Company
1 expressed as a percentage of pay, are generally in line
2 with those of peer utilities . This indicates that the
3 Company' s benefits package, and the benchmarking process
4 used to evaluate it, continue to meet their intended
5 objectives . At the same time, the Company continues to
6 manage benefit costs responsibly, ensuring that its
7 offerings remain both competitive and cost-effective in
8 support of a stable, high-quality workforce .
9 Q. What is the Company requesting in this case
10 with regard to benefits-related costs?
11 A. The O&M benefits-related costs (excluding
12 pension) included in the 2025 test year are approximately
13 $67 . 5 million .
14 VI . TOTAL REWARDS COSTS IN 2025 TEST YEAR
15 Q. What are the expected Total Reward costs for
16 the 2025 test year?
17 A. As shown in Table 5 below, Idaho Power' s
18 forecasted Total Rewards costs for the 2025 test year total
19 approximately $263 . 5 million. This total is comprised of
20 $144 . 8 million in 0&M wages, $67 . 5 million in 0&M benefits,
21 $15 . 4 million for incentive compensation, and $35 . 7 million
22 for pension, an amount for which no change is proposed in
23 this case. Further detail regarding labor cost development
24 is provided in Company Witness Mr. Matthew T. Larkin' s
25 direct testimony.
GRIFFIN, DI 31
Idaho Power Company
1 Table 5
2 Total Reward Costs - 2025 Test Year
2025 Test
Total Reward Component Year
0&M Wages $ 144.8
0&M Benefits $ 67.5
Incentive $ 15.4
Pension $ 35.7
Total $ 263.5
3
4 Q. Does this conclude your direct testimony in
5 this case?
6 A. Yes, it does .
7
8
GRIFFIN, DI 32
Idaho Power Company
1 DECLARATION OF SARAH GRIFFIN
2 I, Sarah Griffin, declare under penalty of perjury
3 under the laws of the state of Idaho:
4 1 . My name is Sarah Griffin. I am employed by
5 Idaho Power Company as Vice President of Human Resources .
6 2 . To the best of my knowledge, my pre-filed
7 direct testimony is true and accurate.
8 I hereby declare that the above statement is
9 true to the best of my knowledge and belief, and that I
10 understand it is made for use as evidence before the Idaho
11 Public Utilities Commission and is subject to penalty for
12 perjury.
13 SIGNED this 30th day of May 2025, at Boise, Idaho.
14 gg4-
15 Signed.
16 Sarah Griffin
GRIFFIN, DI 33
Idaho Power Company