20250612Reply Comments.pdf

—�IQAHO Ro
RECEIVED
DONOVAN WALKER June 12, 2025
Lead Counsel IDAHO PUBLIC
dwalker(a)idaho power.corn UTILITIES COMMISSION
June 12, 2025
VIA ELECTRONIC FILING
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-25-03
In the Matter of the Application of Idaho Power Company for Approval of the
North Valmy Power Plant Natural Gas Conversion Agreement with NV
Energy
Dear Commission Secretary:
Attached for electronic filing, please find Idaho Power Company's Reply
Comments in the above-entitled matter.
If you have any questions about the attached documents, please do not hesitate
to contact me.
Very truly yours,
Donovan Walker
DW:sg
Attachments

DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker(o-)idahopower.com
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S APPLICATION FOR ) CASE NO. IPC-E-25-03
APPROVAL OF THE NORTH VALMY )
POWER PLANT NATURAL GAS ) IDAHO POWER COMPANY'S
CONVERSION AGREEMENT WITH NV ) REPLY COMMENTS
ENERGY. )
COMES NOW, Idaho Power Company ("Idaho Power" or "Company"), and,
pursuant to Idaho Public Utilities Commission's ("Commission") Rules of Procedure 201-
204 and the Notice of Modified Procedure, Order No. 36530, hereby respectfully submits
the following Reply Comments in response to Comments filed by Commission Staff
("Staff"), the Idaho Irrigation Pumpers Association, Inc. ("IIPA"), and the City of Boise City
("City of Boise"), on May 29, 2025.
IDAHO POWER COMPANY'S REPLY COMMENTS - 1

I. BACKGROUND
1. The North Valmy power plant ("Valmy") is a coal-fired power plant that
consists of two units. Idaho Power has a 50 percent ownership share in the plant and NV
Energy is the co-owner and operator of the plant with the remaining 50 percent ownership
share. The Company is obligated to exit coal operations at Valmy by a multi-party,
Commission-approved, settlement from 2017 that requires Idaho Power to either: (a)
reach an agreement with NV Energy to "permanently cease burning coal" on or before
December 31, 2019, for Unit 1 and on or before December 31, 2025, for Unit 2; or (b)
failing to accomplish (a) Idaho Power will end its participation in Valmy by those same
dates. Case No. IPC-E-16-24, Settlement Stipulation, p 5-6. That settlement further
provides for the continued evaluation of unit closures: "Idaho Power will conduct ongoing
analyses to evaluate the economics of a Unit 2 retirement and submit the results as part
of its Integrated Resource Plan." Id. at p 5. The Company exited coal-fired operations of
Unit 1 on December 31, 2019, as accepted by the Commission in Order No. 33983 as
part of Idaho Power's 2017 Integrated Resource Plan ("IRP"). Further, the 2021 IRP
Preferred Portfolio identified an exit from Unit 2 in 2025 provides a more favorable
economic outcome when compared to an earlier exit.
2. Under the Commission's direction, for nearly a decade, Idaho Power has
made prudent and commercially reasonable efforts to cease participation in coal-fired
operations of Valmy by December 31, 2025. First, the Company worked to align the 2025
end-of-life date with NV Energy as committed in the 2015 IRP Action Plan. Upon
agreement with NV Energy, in 2016, Idaho Power filed a request for approval of an
accelerated depreciation schedule for Valmy, reflecting a December 31, 2025, end-of-life
IDAHO POWER COMPANY'S REPLY COMMENTS -2

date for both units. In the Settlement Stipulation adopted by the Commission in that case,
the Company agreed to reach an agreement with NV Energy for cessation of coal-fired
operations of Unit 1 by December 31, 2019, and Unit 2 on, or before, December 31, 2025,
or in the alternative, Idaho Power would end its participation in the plant by those same
dates.
3. In 2019, Idaho Power and NV Energy reached an agreement that would
allow for the Company's exit from participation in Unit 1 by December 31, 2019, and Unit
2 by December 31, 2025. As part of the request for approval of the agreement, the
Commission required that Idaho Power file an analysis that validated the December 31,
2025, closure date of Unit 2, if not before. The Company performed the analysis, which
was filed for acknowledgment, and in their order approving the exit date, the Commission
acknowledged December 31, 2025, as the most cost-effective and necessary to continue
to provide reliable electric service through 2025. Finally, as directed by the Commission,
Idaho Power again analyzed the 2025 end-of-life date as part of the 2021 IRP, further
confirming that the appropriate shutdown date is year-end 2025.
4. As explained in the Direct Testimony of Mr. Jared Ellsworth, the 2023 IRP
Preferred Portfolio included the conversion of Valmy Units 1 and 2 from coal to natural
gas operations by summer 2026, indicating the conversion is the least-cost, least-risk
option necessary to continue providing reliable, electric service to customers into the
future. Subsequent to acknowledgement of the 2023 IRP by the Commission, as well as
NV Energy's support from the Public Utilities Commission of Nevada, Idaho Power and
NV Energy collaborated to develop the terms necessary for the conversion to natural gas
operations at Valmy including the allocation of costs, rights to output from the units, and
IDAHO POWER COMPANY'S REPLY COMMENTS - 3

maintenance and operation of Valmy in accordance with the existing Valmy ownership
and operation agreements, which were memorialized in the Natural Gas Conversion
Agreement ("Conversion Agreement") included as Confidential Exhibit No. 5 to the Direct
Testimony of Mr. Ryan Adelman, which the Company seeks Commission approval of in
this proceeding.
5. On May 29, 2025, Comments were filed in this case by Staff, City of Boise
and IIPA. Staff recommends the Commission approve the Conversion Agreement and do
so contingent upon Idaho Power providing evidence that operating Units 1 and 2 as a
coal plant through 2028 before converting to gas operations was either not feasible or
more costly than converting to gas operations in 2026. Staff also recommends: (1) when
requested, recovery be based on appropriate and prudently incurred actual costs, and (2)
the Commission direct the Company to file a compliance filing in this case and an update
of the report when Idaho Power seeks cost recovery.' The City of Boise recommends
conditional approval of the Conversion Agreement.' In their Comments, the IIPA states
the Company has not demonstrated the Valmy conversion to gas operations represents
a least-cost, least-risk resource, but in the event the Commission approves Idaho Power's
request, IIPA recommends: (1) cost containment measures in the form of a capital cost
cap, (2) stranded cost safeguards, and (3) utilization reporting to protect ratepayers from
cost overruns or poor utilization. 3
6. In these Reply Comments, Idaho Power responds to the recommendations
offered by Staff and the City of Boise, and addresses IIPA's concerns with the
Staff Comments, page 7.
2 City of Boise Comments, page 4.
3 IIPA Comments, page 15.
IDAHO POWER COMPANY'S REPLY COMMENTS -4

identification of the conversion of Valmy to natural gas operations as a least-cost, least-
risk resource and the proposed cost containment measures resulting from those
concerns. The Commission should approve the Conversion Agreement but reject Staff's
proposed analysis evaluating the operation of Valmy as a coal plant through 2028, reject
the City of Boise's proposal that approval of the Conversion Agreement be conditional,
and reject IIPA's unfair and unwarranted cost containment measures and penalties.
II. REPLY COMMENTS
A. Continued Coal Operations through 2028 as Recommended by Staff is not
an Option.
7. In addition to the plain language of the settlement, the case history and
additional analyses following Commission approval of the settlement all support the exit
from Valmy coal-fired operations in 2025. The Company has a lengthy case history that
supports Idaho Power's efforts, under the Commission's direction, to exit participation in
coal-fired operations at Valmy by December 31, 2025, or sooner. Simply stated, Staff's
suggested Alternative 3, which is to operate Units 1 and/or 2 as a coal plant through 2028
before converting the units to natural gas' would be in conflict with prior Commission
orders.
8. The Company first began analyzing an earlier exit from Valmy when, in
2014, the Public Utilities Commission of Nevada ("PUCN") approved a 2025 end-of-life
date for both Valmy units for NV Energy.5 Because the existing Valmy ownership and
operating agreements would require negotiation with NV Energy to modify or terminate,6
4 Staff Comments, page 3.
e Docket No. 13-060002, Modified Final Order dated January 29, 2014.
s Agreement for the Ownership of the North Valmy Power Plant Project and Agreement for the Operation
of the North Valmy Power Plant Project.
IDAHO POWER COMPANY'S REPLY COMMENTS - 5

and absent the ability for Idaho Power to acquire or develop the skills and experience to
operate a coal-fired plant on its own, the 2025 end-of-life date utilized by NV Energy at
the time provided an indication that the Valmy plant would not be operational beyond
2025.
9. Simultaneous to the PUCN approving a 2025 end-of-life date for NV Energy,
as part of Idaho Power's 2015 IRP, the Company analyzed a variety of retirement dates
for Valmy. The 2015-2018 action plan of the 2015 IRP, acknowledged with Order No.
33441,' included the requirement that Idaho Power work with NV Energy to synchronize
depreciation dates and determine if a date could be established to cease coal-fired
operations. Because the Commission's acknowledgement of an IRP is not approval of a
prudent resource decision, as noted by Staff,$ in early 2016, as part of preparation for an
upcoming depreciation study, because of the significant changes that had occurred with
regard to the life of the Valmy plant, Idaho Power identified the need for a specific review
of the Valmy end-of-life dates by the Commission. As such, the Company filed Case No.
IPC-E-16-24, requesting approval to accelerate the depreciation schedule for Valmy to
reflect a December 31, 2025, end-of-life date for both units ('2016 Valmy Case").
10. In the 2016 Valmy Case, Idaho Power received its first directive from the
Commission to cease participation in coal-fired operations of Valmy by 2025. In that case,
Idaho Power entered into a Settlement Stipulation with Staff, IIPA, Micron Technology,
Inc., the U.S. Department of Energy and Federal Executive Agencies, the Idaho
Conservation League and Sierra Club, and the Industrial Customers of Idaho Power
('2016 Valmy Case Parties"), which the 2016 Valmy Case Parties agreed represented a
Case No. IPC-E-15-19.
8 Staff Comments, page 5.
IDAHO POWER COMPANY'S REPLY COMMENTS - 6

fair, just, and reasonable compromise of the dispute(s) between the 2016 Valmy Case
Parties, and that the Settlement Stipulation was in the public interest.'As part of the 2016
Valmy Case Settlement Stipulation, the Company agreed to use prudent and
commercially reasonable efforts to:
a. Reach an agreement with Valmy co-owner NV Energy to amend the
North Valmy ownership and operating agreement to provide that (i)
North Valmy Unit 1 shall permanently cease burning coal on or before
December 31, 2019, and (ii) North Valmy Unit 2 shall permanently
cease burning coal on or before December 31, 2025; or
b. In the absence of paragraph 11.a above, Idaho Power will end its
participation in the operation of Valmy Unit 1 by December 31, 2019,
and Valmy Unit 2 by December 31, 2025.10
The Commission adopted the 2016 Valmy Case Settlement Stipulation with Order No.
33771, finding the agreement was the "result of substantial negotiations in which all [2016
Valmy Case] Parties participated and to which the [2016 Valmy Case] Parties agreed""
and further, the Commission "recognize[d] the considerable efforts of the [2016 Valmy
Case] Parties and commend their cooperation in reaching agreement on the various
complex issues"12 in the case.
11. In support of the 2016 Valmy Case Settlement Stipulation, and as directed
by the Commission, Idaho Power and NV Energy commenced negotiations and after
years of negotiating, executed an agreement that would allow for the Company's
cessation of participation in coal-fired operations at Valmy, the North Valmy Project
Framework Agreement between NV Energy and Idaho Power dated as of February 22,
2019 ("Framework Agreement"). As such, the Company filed Case No. IPC-E-19-08,
9 Case No. IPC-E-16-24, Settlement Stipulation and Motion to Approve Settlement Stipulation.
�o Id. pg. 6
" Order No. 33771, page 7.
12 Id.
IDAHO POWER COMPANY'S REPLY COMMENTS - 7

requesting approval of the Framework Agreement. In their order approving Idaho Power's
request,13 the Commission also required the Company file an analysis validating the
December 31, 2025, closure date of Unit 2, following Staff's recommendation that Idaho
Power confirm "there is no material economic benefit associated with closing Unit 2 prior
to December 31, 2025." (emphasis added).14
12. In accordance with the Commission's direction in Order No. 34349, the
Company conducted focused system reliability and economic analyses to assess the
appropriate timing of a Unit 2 exit between 2022 and 2025. The results indicated that
Idaho Power was unable to meet the reliability requirements if participation in coal-fired
operations of Valmy Unit 2 ceased in 2022 without procuring an alternate source of peak
capacity. The Company identified four alternatives to delaying a Unit 2 exit for Valmy until
2025, but the results of the economic analysis indicated that operating Valmy Unit 2
through 2025 was more cost-effective. The results of the system reliability and economic
analyses were presented in Case No. IPC-E-21-12, In the Matter of Idaho Power
Company's Application for a Determination Acknowledging its North Valmy Power Plant
Exit Date ("2021 Valmy Case"). In their final order, the Commission acknowledged
"December 31, 2025, as the appropriate exit date from Unit 2,1115 and again directed Idaho
Power "to continue evaluating potential scenarios that may allow it to provide notice to
NV Energy in accordance with the Framework Agreement and exit Unit 2 prior to
December 31, 2025." (emphasis added).16
13 Order No. 34349, page 4.
14 Case No. IPC-E-19-08, Staff Comments, page 4.
15 Order No. 35217, page 6.
16 Order No. 35217, page 7.
IDAHO POWER COMPANY'S REPLY COMMENTS - 8

13. The Company again analyzed an earlier exit of Unit 2 as part of the 2021
IRP, as committed to under the 2016 Valmy Case Settlement Stipulation" and as
recommended by the Commission in Order No. 35217 in the 2021 Valmy Case:
The 2021 IRP is an opportunity for the Company to examine the feasibility of an
early exit through the long-term planning process. We expect the Company to
continue analyzing all potential replacement options for Unit 2 and to seek the most
prudent resource or combination of resources to ensure continued reliability for
customers in its energy planning decisions. If a viable replacement resource does
come available, we expect the Company will take the proper steps to facilitate an
early exit from Unit 2. 18
The portfolio analyses performed for the 2021 IRP, and as directed by the Commission,
further confirmed that the appropriate Valmy Unit 2 shutdown date is year-end 2025,
which was reflected in the 2021 — 2027 Action Plan. The Commission acknowledged
Idaho Power's 2021 IRP with Order No. 35603.19
14. In their Comments, Staff fails to acknowledge the purpose and intent of the
2016 Valmy Case Settlement Stipulation, suggesting the Company did not provide
sufficient evidence that would have ruled out the ability to operate Units 1 and 2 as coal
through 2028, when in fact Idaho Power is prohibited from participating in coal-fired
operations after 2025 under the 2016 Valmy Case Settlement Stipulation. The willful
disregard of the terms under which all the parties to the 2016 Valmy Case agreed, could
result in legal action by any of the parties to the case. The 2016 Valmy Case Settlement
Stipulation approved by Order No. 33771, is indeed sufficient to prevent the Company
from continued coal-fired operations at Valmy beyond 2025, contrary to Staff's belief.20
17 See paragraphs 10 and 11.
1s Id.
19 IPC-E-21-43.
20 Staff Comments, page 5.
IDAHO POWER COMPANY'S REPLY COMMENTS - 9

15. Further, Staff's reference to Order No. 33771 directing Idaho Power to
conduct ongoing analyses to evaluate the economics of a Unit 2 retirement, fails to include
the entire reference which further stated the Commission expects "the Company will take
the proper steps to facilitate an early exit from Unit 2." (emphasis added).21 Staff's belief
that "the only hard limitation that restricted evaluating operating Valmy beyond 2025 as a
coal plant was the current federally enforceable retirement date of December 31, 2028,1122
is incorrect. Alternatives 1 and 2 as laid out by Staff, are the only possible options for
Idaho Power's participation in Valmy operations: (1) either exit Unit 2 as planned on
December 31, 2025, or (2) participate in the conversion to natural gas operations in 2026.
B. It is Not Feasible for the Company to Continue Participation in Coal-Fired
Operations of Valmy after December 31, 2025.
16. In addition to Staff's proposed Alternative 3 not being viable due to the
terms of the 2016 Valmy Case Settlement Stipulation, Idaho Power's participation in coal-
fired operations at Valmy after December 31, 2025, is currently not feasible. The terms of
the Framework Agreement, which currently envisions coal-fired operations, were
designed to consider the Company's commitment in the 2016 Valmy Case and therefore
indicate that if NV energy continues to operate either unit after December 31, 2025, Idaho
Power's ownership interests in the Valmy plant would be terminated by the conveyance
to NV Energy via an asset purchase agreement. Therefore, contractually, the Company
has no avenue to participate in coal-fired operations beyond 2025 regardless of resource
need as suggested by Staff.23 Further, Idaho Power's participation in Valmy following
December 31, 2025, can only occur, contractually, with approval of the Conversion
21 Order No. 35217, page 7.
22 Staff Comments, page 6.
23 Staff Comments, pg. 5.
IDAHO POWER COMPANY'S REPLY COMMENTS - 10

Agreement, which amends the Framework Agreement to reflect natural gas operations,
as requested in this case.
17. The Company's efforts to amend the existing Valmy agreements to allow
for Idaho Power's continued participation in Valmy operations after 2025 were premised
on the direction from the Commission following agreement with the Parties of the 2016
Valmy Case as well as the 2021 Valmy Case. Staff, however, implies the Company should
have influenced NV Energy's decision to cease coal-fired operations at Valmy and instead
extend coal-fired operations.24 It is unreasonable to suggest that, despite the terms
agreed to under the Framework Agreement that provided a clear path for Idaho Power's
exit from coal-fired activities, NV Energy would have any indication the Company would
want to analyze the extension of coal-fired operations. Further, it is unreasonable to
suggest Idaho Power would consider analyzing the extension of coal-fired operations
following the 2016 Valmy Case Settlement Stipulation and the 2021 Valmy Case which
both directed the Company to make good faith efforts to exit participation in coal-fired
operations by 2025 or sooner. Both NV Energy and Idaho Power have continuously
discussed and evaluated the economic operating life of Valmy since the PUCN first
approved a 2025 end-of-life date for Valmy over a decade ago.
18. Staff's belief that"the only hard limitation that restricted evaluating operating
Valmy beyond 2025 as a coal plant was the current federally enforceable retirement date
of December 31, 2028,1125 is flawed. The federally enforceable retirement dates of
December 31, 2028, for both Valmy units was identified as part of a revision to Nevada's
Regional Haze State Implementation Plan ("SIP") filed with the Environmental Protection
21 Staff Comments, page 6.
25 Id.
IDAHO POWER COMPANY'S REPLY COMMENTS - 11

Agency ("EPA") in August 2022. However, following the identification of natural gas
operations at Valmy as a potential cost-effective resource by both NV Energy and Idaho
Power, in July 2023, NV Energy met with the Nevada Division of Environmental Protection
("NDEP") to assess the steps necessary under the Regional Haze Rules to pursue
continued operation of Valmy Units 1 and 2 by converting to natural gas operations in lieu
of the December 31, 2028, federally enforceable retirement date.
19. As a result, on July 27, 2023, the NDEP partially rescinded the Regional
Haze SIP prior to the EPA acting on it. Once NV Energy received approval from the PUCN
to pursue converting Valmy to natural gas operations, which occurred on March 1, 2024,
NV Energy submitted an application for an air permit modification to convert both Units 1
and 2 to natural gas operations no later than June 1, 2027. As such, the Regional Haze
Rule legally enforceable date was revised to reflect completion of the natural gas
conversion by July 1, 2027, preventing the ability to continue coal-fired operations at
Valmy. Even if Idaho Power were contractually able to continue participation in coal-fired
operations at Valmy beyond 2025, and it was practical to do so, the current Regional
Haze Rule legally enforceable date is based on a natural gas conversion and is set for a
conversion by July 1, 2027, not December 31, 2028, and not as coal operations, as
indicated by Staff. Performing an analysis to determine the cost of operating Valmy with
coal as opposed to natural gas when the proposed scenario is not feasible as Staff
suggests'26 is impractical.
26 Staff Comments, page 6.
IDAHO POWER COMPANY'S REPLY COMMENTS - 12

C. Idaho Power's Supplemental Analysis is Further Evidence that the Valmy
Gas Conversion is the Least-Cost, Least-Risk Option Necessary to Continue
to Provide Reliable, Electric Service Beyond 2025.
20. Following discussions and alignment between the Company and NV Energy
in early 2023, as part of the 2023 IRP, Idaho Power modeled as a potential future
resource, the conversion of both units to natural gas operations in 2026, which was
ultimately selected as a component of the 2023 IRP Preferred Portfolio. Subsequently,
the Company and NV Energy collaborated and developed the terms for the gas
conversion that would allow for Idaho Power's continued participation in Valmy
operations, memorialized in the Conversion Agreement. Because the cost responsibilities
in the Conversion Agreement differed from those modeled as part of the 2023 IRP, the
Company performed a supplemental analysis to confirm the economics of the Valmy
conversion would not change. The results indicated conversion of Valmy to natural gas
operations in 2026 continues to be more cost-effective than the portfolio that assumes
the Company exits from Valmy in 2025, by more than $880 million on a net present value
basis over the 20-year planning period.
21. Idaho Power appreciates Staff's review and support of the supplemental
analysis, and the conclusion that it "provides sufficient evidence that between completely
exiting Valmy at the end of 2025 and converting Units 1 and 2 to natural gas in 2026,
converting both units in 2026 is the least cost, least risk alternative.1127 With upfront capital
costs only a fraction of what a new, 261 MW resource would cost, and comparable fuel
costs and non-fuel operations and maintenance expenses, the conversion of the existing
Valmy plant to gas operations is a cost-effective alternative to procuring a new resource.
27 Staff Comments, page 4.
IDAHO POWER COMPANY'S REPLY COMMENTS - 13

In addition, as evidenced by the Company's request in Case No. IPC-E-24-45, In the
Matter of Idaho Power Company's Application for a Certificate of Public Convenience and
Necessity for Two Battery Storage Facilities, there are no other viable resources able to
meet Idaho Power's 2026 capacity need. The conversion of Valmy to natural gas
operations in 2026 is a cost-effective, necessary, and timely resource addition.
22. Staff performed a thorough review of the Conversion Agreement, noting that
the "updates and changes appear appropriate to allow existing documents to align with
the proposed Conversion Agreement."28 The City of Boise also provided support,
recommending the Commission "approve the Conversion Agreement [Idaho Power]
entered with NV Energy to transition Valmy Units 1 and 2 from coal to natural gas.1129 In
their Comments however, Staff expressed concern with the financial commitments
associated with (1) exit fees for Unit 1 that the Company is required to pay, (2)
decommissioning, demolition, and closure activities, and (3) maintenance and upgrades
to Unit 1 since December 31, 2019, that support natural gas operations of the unit,30
suggesting Idaho Power provide a report detailing the financial commitments when
known. While the Company is not opposed to providing the information via a report, Idaho
Power would note that, because the conversion to natural gas operations is occurring in
2025, the costs have been included in the Company's general rate case request, Case
No. IPC-E-25-16, currently pending with the Commission, providing an opportunity for
Staff to review as part of that proceeding. Therefore, the requirement to file a report in
compliance with an order in this case may be better accomplished through review in Case
28 Staff Comments, page 6.
29 City of Boise Comments, page 4.
30 Staff Comments, pages 6-7.
IDAHO POWER COMPANY'S REPLY COMMENTS - 14

No. IPC-E-25-16, and the requirement to provide a report when the Company seeks cost
recovery, would immediately be overdue.
D. The Company's Clarification of the IRP Modeling Properly Identifies the
Conversion to Natural Gas Operations of Valmy as a Least-Cost, Least-Risk
Resource.
23. In their Comments, IIPA draws a number of conclusions regarding the
modeling that resulted in the selection of the conversion of the Valmy units to natural gas
operations as a least-cost, least-risk resource that are incorrect. In response, Idaho
Power addresses and provides clarification of the extensive and robust modeling
performed. In addition, the Company addresses the City of Boise's recommendation that
approval of the Valmy conversion to natural gas operations be conditional.
i. The selection of the conversion of the Valmy units to natural _-gas
operations was least-cost.
24. IIPA's declaration that "Valmy Units 1 and 2 were not selected as a least
cost resource in Idaho Power's most recent IRP" is factually incorrect. The conversion to
natural gas operations of both Valmy units were economically selected by Aurora as the
least-cost, least-risk option for meeting the Company's resource needs beginning in 2026.
To validate Aurora's economical selection, as part of the 2023 IRP, portfolios were tested
whereby only the conversion to natural gas operations of Unit 2 occurred or neither unit
was converted. The conversion of Units 1 and 2 were found to be more cost-effective, by
as much as $78 million on a net present value basis, than the other cases. Further, in
testing these portfolios, both the stochastic and qualitative risk assessments found that
the conversion of both units was lower risk than either alternative.
25. The extensive, robust modeling of Valmy operations performed as part of
the IRP process is mischaracterized by IIPA; identification of the Valmy gas conversion
IDAHO POWER COMPANY'S REPLY COMMENTS - 15

as a least-cost, least-risk resource beginning in 2026 is not based solely on the results of
Loss of Load Expectation ("LOLE") analysis.31 Rather, the LOLE is one component of a
suite of analyses performed. First, Aurora's Long-Term Capacity Expansion ("LTCE")
modeling platform develops least-cost portfolios through the selection of a variety of
supply- and demand-side resource options, including both existing and potential future
resource options, for a variety of alternative future scenarios, as acknowledged by IIPA.32
Idaho Power must ensure those portfolios meet the Company's reliability requirements
and uses the LOLE methodology to do so.
26. Just as the LTCE modeling develops portfolios over the 20-year planning
horizon, the LOLE analysis ensures those portfolios meet the annual reliability hurdles
over the same 20-year planning horizon, not simply the "reliability standards for the
summer 2026,1133 as indicated by IIPA. As a probabilistic analysis, the LOLE considers
multiple weather years of data across the 20-year planning period, incorporates hourly
historical generator performance and assigned forced outage rates, and considers all
8,760 Loss of Load Probability values in a calendar year. Idaho Power's application of the
LOLE methodology for portfolio development is an analytical approach to a long-term
probabilistic analysis, and not as simplistic as a "deterministic, single-year snapshot."34
The selection of the conversion to natural gas operations of both Valmy units was
analyzed alongside all resource options, over the 20-year planning period, and identified
as one of the least-cost, least-risk resource options. The characterization that the
selection of the Valmy gas conversion was a "binary include or exclude assumption" that
31 IIPA Comments, pages 4-5.
32 Id., page 6.
ss Id., page 4.
14 Id., page 6.
IDAHO POWER COMPANY'S REPLY COMMENTS - 16

was not based on cost or risk performance,35 is a blatant misrepresentation of the
extensive, robust modeling process Idaho Power undertakes in the development of the
IRP.
27. Following execution of the Conversion Agreement, to ensure conversion to
natural gas operations continued to remain a least-cost, least-risk resource option based
on the most recent cost assumptions, the Company performed a supplemental analysis
to confirm the economics of the Valmy conversion did not change. IIPA's suggestion that
Idaho Power performed the analysis to justify the conversion after the fact is a gross
mischaracterization of the intent and purpose of the analysis.36 Rather, it would be
imprudent for the Company to ignore cost changes that could potentially impact the cost-
effectiveness of a resource selection.
ii. Analysis of natural _gas operations of Valmy beyond 2042 should be
evaluated as part of future IRPs.
28. In their Comments, the City of Boise provides conditional support of the
Valmy conversion to natural gas operations "only to the extent that it remains consistent
with Idaho Power's 2045 clean energy goal and that it is explicitly identified as
temporary."31 The Company appreciates the City of Boise's support of Idaho Power's
2045 clean energy goal but does not believe it is necessary to identify the conversion as
temporary. As part of the IRP modeling, as evidenced with the 2023 IRP, the Company
can evaluate the economics associated with the early retirement of the converted Valmy
natural gas units as compared to running the units through the entire 20-year plan. Idaho
Power believes it is more appropriate to evaluate the economic exit of the Valmy units in
35 IIPA Comments, page 7.
36 Id.
37 City of Boise Comments, page 2.
IDAHO POWER COMPANY'S REPLY COMMENTS - 17

future IRPs, when appropriate, and that evaluating unit exits immediately after conversion
is premature. As such, the condition that the Conversion Agreement is approved only if it
is considered temporary, is not necessary.
III. CONCLUSION
29. Idaho Power acknowledges and appreciates IIPA, the City of Boise, and
Staff's review of the Company's application and respectfully requests the Commission (1)
accept the City of Boise and Staff's recommendation to approve the Conversion
Agreement, (2) reject Staff's requirement that the Company analyze operating Valmy as
a coal plant through 2028, (3) reject the City of Boise's proposal that approval of the
Conversion Agreement is conditional, and (4) reject IIPA's proposed cost containment
measures, as the conversion of Valmy to natural gas operations in 2026 remains a least-
cost, least-risk, reliable, and necessary resource.
DATED at Boise, Idaho this 12t" day of June 2025.
DONOVAN E. WALKER
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S REPLY COMMENTS - 18

CERTIFICATE OF SERVICE
HEREBY CERTIFY that on the 12th day of June, 2025, 1 served a true and correct
copy of Idaho Power Company's Reply Comments upon the following named parties by
the method indicated below, and addressed to the following:
Commission Staff Hand Delivered
Chris Burdin U.S. Mail
Deputy Attorney General Overnight Mail
Idaho Public Utilities Commission FAX
11331 W. Chinden Blvd., Bldg No. 8 FTP Site
Suite 201-A (83714) X Email Chris.Burdin(a)puc.idaho.gov
PO Box 83720
Boise, ID 83720-0074
Micron Technology, Inc. Hand Delivered
Austin Rueschhoff U.S. Mail
Thorvald A. Nelson Overnight Mail
Austin W. Jensen FAX
Holland & Hart LLP X Email darueschhoff(a)hollandhart.com
555 17th Street, Suite 3200 tnelson hol land hart.com
Denver, CO 80202 awiensen(a)hollandhart.com
aclee hollandhart.com
Idaho Irrigation Pumpers Association, Inc. Hand Delivered
Eric L. Olsen U.S. Mail
ECHO HAWK & OLSEN, PLLC Overnight Mail
505 Pershing Avenue, Suite 100 FAX
P.O. Box 6119 X EMAIL elo echohawk.com
Pocatello, ID 83205
Lance Kaufman, Ph.D. Hand Delivered
2623 NW Bluebell Place U.S. Mail
Corvallis, OR 97330 Overnight Mail
FAX
X EMAIL Iance(a-)aegisinsight.com
IDAHO POWER COMPANY'S REPLY COMMENTS - 19

City of Boise City Hand Delivered
Ed Jewell U.S. Mail
Jessica Harrison Overnight Mail
Deputy City Attorneys FAX
150 N. Capitol Blvd. X EMAIL BoiseCityAttorney(a cityofboise.org
P.O. Box 500 ejewelICcDcityofboise.org
Boise, ID 83701-0500 jharrison(a�cityofboise.org
Katie O'Neil Hand Delivered
Energy Program Manager U.S. Mail
150 N. Capitol Blvd. Overnight Mail
P.O. Box 500 FAX
Boise, ID 83701-0500 X EMAIL koneil(o-)_cityofboise.org
Stacy Gust, Regulatory Administrative
Assistant
IDAHO POWER COMPANY'S REPLY COMMENTS -20