20250530Direct Hackett - Redacted.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 )
AND AUTHORITY TO IMPLEMENT )
CERTAIN MEASURES TO MITIGATE THE )
IMPACT OF REGULATORY LAG. )
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
ERIC HACKETT

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 Eric Hackett. My business address
5 is 1221 West Idaho Street, Boise, Idaho 83702 . I am
6 employed by Idaho Power as the Projects and Resource
7 Development Director in the Planning, Engineering and
8 Construction department .
9 Q. Please describe your educational background.
10 A. I graduated in 2003 from Boise State
11 University, in Boise, Idaho, receiving a Bachelor of
12 Science Degree in Civil Engineering. I am a registered
13 professional engineer in the state of Idaho. In 2010, I
14 earned a Master of Business Administration from Boise State
15 University.
16 Q. Please describe your work experience with
17 Idaho Power.
18 A. From 2005 to 2007, I was employed as an
19 engineer in Idaho Power' s Transmission Engineering group.
20 In 2007, I became a Project Manager leading transmission
21 and distribution line and station infrastructure projects .
22 In 2012, I was promoted to Engineering Leader where I
23 managed the Cost and Controls group supporting project
24 management . In 2015, I changed leadership roles and managed
25 the Stations Engineering and Design group as an Engineering
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Idaho Power Company

1 Leader. In 2018, I was promoted to Senior Manager of
2 Projects overseeing Project Management and Cost and
3 Controls, which later became the role of Senior Manager of
4 Projects and Design in 2021, adding Power Production Design
5 and Project Management. I was promoted to my current role,
6 Projects and Resource Development Director in 2024 . In
7 addition, I am currently leading a team of internal
8 employees and consultants in development and evaluation of
9 Idaho Power' s Request for Proposals for Peak Capacity and
10 Energy Resources .
11 Q. What is the purpose of your testimony in this
12 matter?
13 A. The purpose of my testimony is to discuss the
14 Company' s utility-scale battery project and the generator
15 interconnection facilities major projects expected to be
16 complete in 2025 and included in the Company' s request in
17 this case . I will discuss the prudent nature of these
18 investments, detailing why they are needed to ensure Idaho
19 Power' s generation fleet is robust and well-positioned to
20 provide continued safe, reliable service to customers .
21 Q. How is your testimony organized?
22 A. My testimony begins with the factors that led
23 to the addition of a utility-scale battery project in 2025,
24 explaining why the Company' s investment in the facility
25 reflects the least-cost, least-risk option to ensure
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Idaho Power Company

1 sufficient capacity to meet customer demand in 2025 and
2 beyond. I also discuss the generation interconnection
3 facilities necessary to connect the utility-scale battery
4 project to Idaho Power' s system as well as two additional
5 generator interconnection facilities investments in 2025 .
6 I . UTILITY-SCALE BATTERY PROJECT
7 Q. What drove the need for the addition of the
8 utility-scale battery project for which the Company is
9 seeking a prudence determination in this case?
10 A. For the past fifteen years Idaho Power' s
11 actual system peak has grown and the Company is expected to
12 experience unprecedented growth over the next five years,
13 requiring the addition of new dispatchable resources to
14 meet system needs . As a result of this growth, as well as
15 limited third-party transmission capacity and a decline in
16 the peak serving effectiveness of certain supply-side and
17 demand-side resources, Idaho Power rapidly moved to a near-
18 term capacity deficiency identifying a capacity deficit in
19 summer 2025 .
20 To meet its obligation to reliably serve customer
21 load and fill the 2025 capacity deficiency, as soon as
22 practicable, the Company commenced a competitive
23 solicitation with the issuance of a Request for Proposals
24 ("RFP") , seeking to acquire energy and capacity to help
25 meet Idaho Power' s previously identified incremental
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Idaho Power Company

1 capacity needs of 115 megawatts ("W') in 2025 ("2022
2 RFP") . This robust competitive bidding process resulted in
3 the (1) execution of a 150 MW energy storage agreement
4 ("ESA") , supplying capacity from the Kuna battery energy
5 storage system ("BESS") to the Company, and (2) procurement
6 of an Idaho Power-owned BESS located in Nampa, Idaho, at
7 the existing Happy Valley station ("Happy Valley BESS") . As
8 a Company-owned resource, the Happy Valley BESS is the
9 utility-scale battery investment included in the Company' s
10 request in this case.
11 Q. Did the Company file a request for a
12 Certificate of Public Convenience and Necessity ("CPCN")
13 for the Happy Valley BESS procurement?
14 A. Yes . Idaho Power filed a request for a CPCN
15 associated with the Happy Valley BESS in Case No. IPC-E-23-
16 20 . The Commission approved the Company' s request with
17 Order No . 36011 and issued Certificate No. 547 granting a
18 CPCN for the acquisition of the new dispatchable energy
19 storage to meet the identified capacity deficiency in 2025 .
20 Q. Did Order No. 36011 impose any conditions on
21 costs associated with the procurement of the Happy Valley
22 BESS?
23 A. Yes . The Commission found it was reasonable to
24 establish a soft cap of for the Happy Valley
25 BESS, adopting Commission Staffs ("Staff") recommendation
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Idaho Power Company

1 due to concerns about anomalies in the 2025 resource
2 selection process to justify a soft cap.' In comments, Staff
3 expressed concerns about beginning of life costs associated
4 with the energy storage facility and therefore calculated
5 the soft cap to only include the cost and amount of
6 capacity of the Happy Valley BESS based on the nameplate
7 capacity without the overbuild amounts, rather than the
8 cost of the total installed capacity. In its order, the
9 Commission did not foreclose future requests by Idaho Power
10 for recovery of costs above the soft cap, but rather
11 indicated the Company would have to provide justification
12 for any costs above the soft cap when requesting rate
13 recovery.
14 Q. How do the Happy Valley BESS costs compare to
15 the Commission' s soft cap?
16 A. The total Happy Valley BESS costs for which
17 the Company is requesting prudence in this case, including
18 the Idaho Power interconnection facilities, are $123 . 4
19 million compared to the Commission-established soft cap of
20 $
21 Q. You indicated the amounts associated with the
22 Happy Valley BESS for which the Company is seeking prudence
23 includes the interconnection facilities . Did Staff' s
' IPC-E-23-20, Order No. 36011, page 6 .
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Idaho Power Company

1 computation of the soft cap include interconnection
2 facilities?
3 A. Yes . The total project costs Staff utilized to
4 compute the soft cap included the estimated cost of Idaho
5 Power interconnection facilities, which are the facilities
6 and equipment between the generating facility and the point
7 of interconnection, including any modification, additions
8 or upgrades, that are necessary to physically and
9 electrically interconnect the generating facility. For
10 purposes of the Company' s budgeting process and tracking of
11 capital projects, the Happy Valley BESS costs are
12 identified separately from the Happy Valley generator
13 interconnection facility costs . However, the costs
14 associated with the two major BESS and interconnection
15 facilities projects, $118 . 1 million and $5 . 3 million,
16 respectively, for a total of $123 . 4 million, is less than
17 the Commission imposed soft cap.
18 Q. Do the Happy Valley BESS project costs include
19 the beginning of life costs associated with the energy
20 storage facility for which Staff had concerns?
21 A. Yes . Beginning of life costs, or overbuild as
22 referenced by Staff, are battery segments added to the BESS
23 to address degradation. Battery cells within a BESS degrade
24 over time . For illustrative purposes, a 100 MW BESS
25 installation will supply 100 MWs to the system on day one;
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Idaho Power Company

1 however, assuming a 7 percent degradation rate, that same
2 100 MW BESS will supply 93 MW to the system after one year.
3 The degradation rate varies and is a function of time and
4 throughput, or megawatt-hours . To mitigate the degradation,
5 additional battery segments are added.
6 As part of the request for a CPCN, the Company
7 included within the project costs of the Happy Valley BESS
8 the overbuild costs associated with day one batteries . By
9 including additional battery segments at the beginning of
10 life, Idaho Power can ensure reliable operation at full
11 nameplate capacity for a minimum of 4 hours through the
12 first five years of operation before necessitating a
13 decision to augment the BESS if the then current capacity
14 is below the nameplate capacity after year five. If the
15 BESS system is not cycled daily, the longevity and
16 assurance of performing above the nameplate capacity beyond
17 five years is likely and thus deferral of future
18 augmentation investments can occur. The configuration is
19 necessary as it provides for the most efficient plant
20 balancing and cell utilization, extending the guaranteed
21 performance of the entire system and ensuring the Company
22 has the capacity necessary to meet customer demand. Absent
23 the beginning of life installed capacity, upon the BESS
24 being placed in service, Idaho Power would immediately be
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Idaho Power Company

1 placed in a resource deficit relative to the required
2 capacity resources needed in 2025 .
3 Q. What was Staff' s concern with the Happy Valley
4 BESS beginning of life costs?
5 A. In their Comments, Staff indicated concerns
6 about the overbuild amounts "due to uncertainties related
7 to cost-effectiveness and when they will become used and
8 useful . "2 However, Idaho Power' s basis for comparison of
9 BESS proposals was consistent among all projects during
10 evaluation through the RFP process . Because some projects
11 bid into the 2022 RFP included overbuild in their proposals
12 and some did not, to ensure a consistent basis for
13 comparison, Idaho Power adjusted all proposal prices to
14 exclude overbuild costs . Because adding battery cells is
15 linear from a cost perspective, the least cost project at a
16 0 overbuild is going to be comparable to a project with a 5
17 year overbuild due to the linear nature of adding battery
18 cells . Therefore, this capacity was appropriately captured
19 when comparing bids submitted as part of the 2022 RFP and
20 the selection of the Happy Valley BESS project resulted in
21 a least-cost resource .
22 Q. Will the beginning of life battery segments
23 associated with the Happy Valley BESS be used and useful
24 when the project is placed in-service?
2 Case No. IPC-E-25-20, Staff Comments, pg. 12.
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Idaho Power Company

1 A. Yes . The recommendation to impose a soft cap
2 was, in part, because Staff felt the Company did not
3 provide certainty about when the overbuilt capacity would
4 become used and useful due to lack of experience owning and
5 operating a BESS, indicating "the manufacturer warranties
6 may also be used for the first several years to mitigate
7 excessive degradation. " It is important to note that
8 manufacturer warranties would only cover the failure of a
9 battery cell, not degradation of the BESS and therefore
10 cannot be relied upon to ensure reliable operation of the
11 BESS at full nameplate capacity. Further, when the soft cap
12 was proposed, Staff failed to recognize Idaho Power' s
13 first-hand experience owning and operating the 80 MW
14 Hemingway BESS, placed in service in 2023 . The 80 MW
15 Hemingway BESS includes overbuild to ensure reliable
16 operation at full nameplate capacity, that became used and
17 useful immediately upon being placed in service. Idaho
18 Power has added several BESS since the Hemingway BESS and
19 thus, has additional experience understanding and
20 leveraging the value of the additional beginning of life
21 battery segments . The additional battery cells result in
22 more time that the BESS can discharge at its nameplate
23 capacity, allowing for 4 . 5 hours of discharging as opposed
24 to only 4 hours of discharging that would occur absent the
25 overbuild. The Happy Valley BESS, as configured, will be
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Idaho Power Company

1 used, useful, and providing benefits to customers as soon
2 as it is placed in service.
3 Q. What is the total capacity associated with the
4 Happy Valley BESS beginning of life battery segments?
5 A. Idaho Power procured sufficient battery
6 segments to mitigate battery degradation for an estimated
7 five years and ensure reliable operation of the Happy
8 Valley BESS at full nameplate capacity. The guaranteed
9 alternating current ("AC") usable energy at the point of
10 interconnection is guaranteed to contribute a minimum of
11 328 megawatt-hours ("MWh") of nameplate energy through year
12 three . To guarantee this nameplate performance, the supply
13 agreement has a beginning of life expected energy of 378
14 MWh. The BESS is a four-hour duration system and requires
15 slightly more capacity at the beginning of life to ensure
16 nameplate ratings after commercial operation for a period
17 of time .
18 Q. What is the full nameplate capacity of the
19 Happy Valley BESS for which the Company received a CPCN?
20 A. Idaho Power received a CPCN to acquire 77 MW
21 of new dispatchable energy storage to meet identified
22 capacity deficiencies in 2025 . However, the Company has
23 since added battery segments to the Happy Valley station to
24 bring the full nameplate capacity of the Happy Valley BESS
25 to 80 MW and to maximize the interconnection facilities and
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Idaho Power Company

1 the 80 MW point of interconnection limitation identified in
2 the Large Generator Interconnection Agreement.
3 Q. Why were extra battery segments added to the
4 Happy Valley station?
5 A. Beginning in 2022, the Company identified
6 various distribution substations that were in need of
7 transformer upgrades . It was determined that a cost-
8 effective alternative to the transformer upgrades was the
9 installation of four-hour duration storage capacity to
10 reduce the substation transformers' peak loading. The four-
11 hour duration storage also had the benefit of reducing
12 incremental system capacity needs . One of those identified
13 distribution substations was the Mountain Home substation
14 and installation of the storage capacity was planned for
15 2025 . At 5 MW, the storage capacity would allow for the
16 deferral of a transformer upgrade for approximately six
17 years .
18 But, between the time the storage capacity was
19 procured for the Mountain Home distribution substation and
20 installation was to occur, the growth in the area increased
21 and was forecasted to exceed the capabilities of the four-
22 hour duration storage . The increased growth drove the need
23 for a new, second substation. The new substation negated
24 the need for the installation of the storage capacity to
25 reduce peak loading at the Mountain Home distribution
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Idaho Power Company

1 substation. Because a termination fee of 50 percent of the
2 battery storage costs would apply if the order was
3 canceled, Idaho Power evaluated alternative sites for the
4 storage capacity. With installation of the Happy Valley
5 BESS underway and below the 80 MW point of interconnection
6 limit, the Happy Valley station was a favorable alternative
7 location for the storage capacity originally intended for
8 the Mountain Home distribution substation. With a total
9 operating capacity of up to 80 MW, the Happy Valley BESS is
10 necessary to ensure continued safe, reliable operations in
11 2025 and beyond.
12 Q. Does the incremental storage capacity reduce
13 the previously identified 2025 capacity deficit?
14 A. No. The additional four-hour duration storage
15 capacity planned at various distribution substations had
16 already been accounted for when computing the capacity
17 deficiency therefore the movement of the storage capacity
18 from the planned Mountain Home distribution substation to
19 the Happy Valley station did not change the previously
20 identified 2025 capacity deficiency.
21 II . INTERCONNECTION FACILITIES
22 Q. What are the interconnection facilities major
23 projects necessary to connect generation projects to Idaho
24 Power' s system that are expected to be complete in 2025 and
25 included in the request in this case?
HACKETT, DI 12
Idaho Power Company

1 A. In addition to the interconnection facilities
2 necessary to connect the Happy Valley BESS to the Company' s
3 system, there are two other generator interconnection major
4 projects : the generator interconnection facilities
5 necessary to connect both the Pleasant Valley Solar 1
6 project and the Kuna BESS project to Idaho Power' s system.
7 Unlike the generator interconnection facilities for the
8 Happy Valley BESS, because the Pleasant Valley Solar 1 and
9 Kuna BESS projects are not Idaho Power-owned facilities, in
10 accordance with the Federal Energy Regulatory Commission-
11 approved Generator Interconnection Procedures under the
12 Company' s Open Access Transmission Tariff ("OATT") , the
13 interconnection customers are responsible for partially
14 funding the investments . The interconnection facilities
15 major projects included in Idaho Power' s request in this
16 case are the portion of the costs that are the Company' s
17 responsibility.
18 Q. What types of generator interconnection
19 facilities are typically Idaho Power' s responsibility?
20 A. Under the GATT, as the transmission provider,
21 the Company is typically responsible for the facilities and
22 equipment from the Point of Change of Ownership to the
23 Point of Interconnection, including any modifications,
24 additions or upgrades to the facilities or equipment. For
25 Pleasant Valley Solar 1, that is anticipated to entail the
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Idaho Power Company

1 meter, a dead-end structure, a 230-kilovolt ("kV") air-
2 break switch, three current transformers, required
3 foundations, and fiber communication equipment. The Kuna
4 BESS interconnection facility investments are anticipated
5 to include a meter, two 138-kV air-break switches, one 138-
E kV breaker, three current transformers, three potential
7 transformers, required foundations, bus, bus supports,
8 fiber, and relay protection equipment. Both projects will
9 require the equipment necessary to collect and transmit
10 Phasor Measurement Unit data to the Company.
11 Q. What is Idaho Power' s total cost associated
12 with the interconnection facilities investments?
13 A. The Company' s portion of the interconnection
14 facility investments included in Idaho Power' s request in
15 this case are estimated to be approximately $4 . 5 million
16 for the Pleasant Valley Solar 1 project and $2 . 3 million
17 for the Kuna BESS project. Both projects are expected to be
18 placed in-service prior to the summer season beginning June
19 1, 2025 .
20 III . CONCLUSION
21 Q. Please summarize your testimony.
22 A. Idaho Power has experienced unprecedented
23 growth over the past decade, resulting in the need for the
24 Company to procure an additional utility-scale battery
25 project in 2025 . Idaho Power' s investment in the Happy
HACKETT, DI 14
Idaho Power Company

1 Valley BESS reflects the least-cost, least-risk option to
2 meet the Company' s resource need, as identified in the 2025
3 CPCN case and affirmed by Commission Order No. 36011 . In
4 addition, the generator interconnection facility projects
5 are necessary to connect three separate generation
6 facilities to the Company' s system, ensuring the continued
7 delivery of safe, reliable electricity to customers .
8 Q. Does this conclude your direct testimony in
9 this case?
10 A. Yes, it does .
11
HACKETT, DI 15
Idaho Power Company

1 DECLARATION OF ERIC HACKETT
2 I, Eric Hackett, declare under penalty of perjury
3 under the laws of the state of Idaho:
4 1 . My name is Eric Hackett. I am employed by
5 Idaho Power Company as the Project and Resource Development
6 Director in the Planning, Engineering and Construction
7 Department.
8 2 . On behalf of Idaho Power, I present this
9 pre-filed direct testimony in this matter.
10 3 . To the best of my knowledge, my pre-filed
11 direct testimony is true and accurate.
12 1 hereby declare that the above statement is true to
13 the best of my knowledge and belief, and that I understand
14 it is made for use as evidence before the Idaho Public
15 Utilities Commission and is subject to penalty for perjury.
16 SIGNED this 30th day of May 2025, at Boise, Idaho.
17 it k
18 Signed:
19 Eric Hackett
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Idaho Power Company