20250627Final_Order_No_36659.pdf

Office of the Secretary
Service Date
June 27,2025
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER ) CASE NO. IPC-E-24-46
COMPANY'S APPLICATION FOR )
APPROVAL OF A POWER PURCHASE ) ORDER NO. 36659
AGREEMENT WITH JACKALOPE WIND, )
LLC,AND A CERTIFICATE OF PUBLIC )
CONVENIENCE AND NECESSITY FOR THE )
JACKALOPE WIND PROJECT )
On December 27, 2024, Idaho Power Company ("Company") filed an application
("Application") with the Idaho Public Utilities Commission("Commission")requesting an order:
(1)approving a 35-year Power Purchase Agreement("PPA")between the Company and Jackalope
Wind, LLC ("Jackalope"); and(2) granting the Company a Certificate of Public Convenience and
Necessity ("CPCN") to acquire 300 megawatts ("MW") of generation to meet an identified
capacity deficiency in 2027. Application at 1-2.
On January 30, 2025, the Commission issued a Notice of Application and Notice of
Intervention Deadline. Order No. 36450. The Commission granted intervention to the Industrial
Customers of Idaho Power, the Idaho Irrigation Pumpers Association, Inc. ("IIPA"), and Micron
Technology, Inc. Order Nos. 36486 and 36493.
On April 25, 2025, the Commission issued a Notice of Modified Procedure setting a May
13,2025,public comment deadline, and a June 3, 2025, Company reply comment deadline. Order
No. 36563. On May 13, 2025, Commission Staff("Staff') and IIPA filed comments. On June 3,
2025, the Company filed reply comments.
On June 6, 2025, IIPA filed a reply to the Company's reply comments. On June 9, 2025,
the Company filed an Objection to IIPA's reply comments. On June 16, 2025, IIPA filed an
Answer to the Objection and an Application for Intervenor Funding.
THE APPLICATION
The Company represented that the PPA is a 35-year PPA between the Company and
Jackalope, who will construct, own, operate and maintain a 300 MW wind powered generation
facility located in Sweetwater County, Wyoming, supplying approximately 300 MW to the
ORDER NO. 36659 1

Company's system for the period of 35 years from a commercial operation date of June 1, 2027.
Application at 7.
The Company requested that the Commission find the Company has met the requirements
ofldaho Code§ 61-526, and issue an order granting a CPCN to acquire ownership in the Jackalope
Wind Project, a wind turbine generator power plant providing approximately 300 MW of
generation necessary to meet the identified capacity deficiency in 2027. Id. at 8. The Company
represented that it was not requesting binding ratemaking treatment in this case, and the Company
would make a future filing to address the cost recovery associated with this project.Id. at 11.
The Company represented that it intended to finance the Jackalope Wind Project with a
combination of available cash and operating cash flow, available credit facilities and borrowing
and debt issuances, and future equity infusions by IDACORP.Id. at 11-12.
PUBLIC COMMENTS
The Commission did not receive any public comments.
STAFF COMMENTS
Staff had significant concerns with the Jackalope Wind Project. Staff comments at 2. Staff
noted that the Jackalope Wind Project contributed relatively little toward the capacity deficit
despite a large capital investment. Id. Staff believed that was because the project provided
inexpensive, tax-subsidized energy, which provided the advantage it needed to be lower cost than
other potential alternatives, even though the contribution to capacity was relatively small. Id.
However, Staff explained that the new presidential administration has taken actions that
jeopardized the federal permits for the project and jeopardized the tax credits that make Jackalope
Wind Project least-cost. Id. Staff believed that made the project riskier for both reliability and
economic reasons. Id. Staff noted that under more normal circumstances, Staff would not
recommend that the Commission approve the Jackalope Wind Project; however, Staff noted that
the Company faces a rapidly increasing system load, delays with other new resources, and
compressed timelines, so the Company has few, if any, other options besides this project. Id.
Ultimately, Staff recommended that the Commission:
1. Approve the PPA for 300 MW of wind generation;
2. Grant the Company a CPCN for 300 megawatts ("MW") of generation to meet an
identified capacity deficiency in 2027;
ORDER NO. 36659 2

3. Direct the Company to use a 30-year life expectancy for accounting purposes and for
future Integrated Resource Plan("IRP")modeling for the build-transfer agreement
("BTA");
4. Forbid the Company from recovering corresponding Production Tax Credit("PTC")
revenue requirement for the Jackalope BTA if the federal PTCs are rescinded;
5. Direct the Company to consider different ways to delay or mitigate large-load growth;
and
6. As a supplement to Case No. IPC-E-23-01, require the Company to provide a report
comparing the current cost of 132H with and without schedule delays from a total cost
perspective.
IIPA COMMENTS
Initial Comments
IIPA believed that several clear risk factors existed with respect to the proposed Jackalope
Wind Project, and that without a Commission ruling for cost containment,the impact of those risks
might be carried by ratepayers. IIPA Comments at 4. IIPA argued that the Jackalope Wind Project
was neither necessary nor prudent on the basis of externalities such as changes in federal policy
and macroeconomic terrain, as well as how inconsistencies in the Company's modeling both
overestimate capacity need as well as underestimate costs associated with the project. Id.
Specifically, IIPA argued that: (1) the PTC may not be available; (2) permitting and
execution risks remain outstanding for the project; (3) seasonal variability was improperly
modeled and may have inflated actual resource need; (4)the Jackalope Wind Project paradoxically
overbuilds but underdelivers effective peak capacity; (5) dispatch conflicts due to transmission
constraints were not adequately considered, which resulted in hidden risks and costs; (6) the
lifecycle risk was understated; and (7) the cost is substantially higher than the marginal cost of
energy. Id. at 5-6. IIPA believed that those factors inflated the perceived economic value while
understating its true cost,potentially resulting in significant ratepayer exposure. Id. at 6.
IIPA concluded that:
The Jackalope Wind Project fails to meet the standard for convenience, necessity,
and prudence for several critical reasons: The project's economic viability relies on
PTC that provide approximately $28/MWh for the first 10 years. However, this
eligibility is contingent on timely permitting, and achieving commercial operation
by 2027. If the project fails to qualify for the PTC credit, the present value of the
lost tax benefits could exceed $199 million, significantly raising the project's
levelized cost.
ORDER NO. 36659 3

Furthermore, permitting and execution risks are of concern: The project remains
dependent on being awarded federal permits, including a BLM Right-of-Way
Grant,and the Record of Decision not expected until March 2026. In addition,there
is a seasonal variability and capacity mismatch: with an ELCC potentially as low
as 10- 20%, the project's effective capacity could be a small fraction of its
nameplate 600 MW rating. Further, dispatch and transmission constraints exist for
the project, and therefore the project risks curtailment and stranded energy,
undermining its value and reliability.Taken together,these factors demonstrate that
the Jackalope Wind Project introduces material financial and operational risks that
undermine its characterization as a least-cost,least-risk resource,or in the public's
best or convenient interest.
If the Company had used realistic cost and performance assumptions for the
Jackalope Wind Project in its 2023 IRP, including a higher LCOE to reflect
potential PTC loss, lower capacity factors, and a more conservative ELCC, it is
unlikely the project would have ranked as a least-cost, least-risk resource. The
Company's decision to evaluate the PPA life over 35 years without comparable
adjustments for other bids, and its failure to account for imputed debt, further skew
the economic analysis in favor of Jackalope. Given these compounding risks, the
1project may expose ratepayers to significantly higher costs than the Company has
presented.
In light of these risks I have recommended that the Commission impose a suite of
cost containment measures, including: a soft cap on total capital cost recovery; a
seasonal cap on cost recovery; a true-up of annual payments to account for seasonal
variation;penalties for transmission and deliverability curtailment; and shareholder
absorbance of PTC risk of loss.
Id. at 24-25.
Reply Comments
IIPA noted that while the Company's reply comments alleviated some of IIPA's minor
concerns with the project, IIPA continued to have deep concerns about the cost effectiveness of
the project and the prudence of the Company's decision to acquire the resource. IIPA Reply
Comments at 1. However, IIPA argued that the Company failed to address: (1)the absence of any
material capacity value; (2)the appropriate ELCC to expect; (3)the risk associated with the PTCs;
and (4) whether an alternative resource, such as a natural gas combined cycle, would provide a
more economical solution to capacity and energy needs.Id. at 1-2.
IIPA argued that,given those concerns,it was critical that the Commission clearly establish
that, at a minimum, any CPCN issued for the Jackalope Wind Project offered no prejudice or
implications for future prudency or cost recovery. Id. at 4. Additionally, IIPA recommended that
the Commission prohibit the Company from recovering any PTC-related revenue shortfall through
ORDER NO. 36659 4

rates, and that the Commission impose a soft cap on capital cost recovery to limit ratepayer
exposure in the event of delays, curtailments, or policy shifts.Id.
Answer to Obiection
IIPA argued that it did not violate any rule of procedure or Order, and the Commission has
the authority to allow parties to reply to another party's reply comment. IIPA Answer at 2. IIPA
believed that the timeframe of the procedural schedule should additionally allow the other party
with time to draft a response and file it with the Commission. Id. Alternatively, IIPA argued that
if the Commission found that the procedural rules did not allow IIPA to reply to the Company's
comment, the Commission may treat IIPA's reply comment as a public comment and give it the
appropriate weight.Id.
COMPANY COMMENTS
Reply Comments
The Company argued that the selection of the Jackalope PPA and the Jackalope Wind
Project (collectively "Jackalope Project") as a least-cost, least-risk 2027 resource was prudent
based on the information known at the time and remains prudent based on information known
today. Company Reply Comments at 4.The Company stated that it completed a robust competitive
resource procurement process for identifying the least-cost, least-risk 2027 resource acquisitions,
which included the Jackalope Project.Id. at 9.
The Company maintained that the selection of the Jackalope Project was least-cost even
though the contribution to the capacity deficit is small.Id. at 10. Further,the Company argued that
the selection of the Jackalope Project was not based on a stale cost effectiveness analysis; the
evaluation of the Jackalope Project was performed alongside other viable 2026 projects; and the
Jackalope Project provides the capacity and energy necessary to meet the identified 2027 capacity
deficiency. Id. at 11-16. The Company argued that it appropriately modeled transmission rights
the Jackalope Project will utilize.Id. at 18.
The Company agreed that improvements need to be made to the competitive bidding
process. Id. at 20. The Company requested that the Commission: (1) accept Staffs
recommendation to approve the Jackalope Wind PPA and grant a CPCN for the Jackalope Wind
Project; (2) accept Staff and IIPA's proposed 30-year life expectancy for the Company-owned
portion of the Jackalope Project for accounting purposes; and(3)reject Staff and IIPA's proposed
cost containment measures, as the Jackalope Project remains a prudent and least-cost, least-risk
ORDER NO. 36659 5

project required to help meet the identified capacity deficit in 2027. Company Reply Comments
at 21-22.
Objection
The Company argued that IIPA was not the moving party and had no authorization in the
Commission's rules or orders to submit a reply to the Company's reply comments that were
authorized by the Notice of Modified Procedure.Company Objection at 2.The Company requested
that IIPA's reply comments be stricken and/or not accepted/considered by the Commission as part
of this proceeding, and that the Commission consider the record closed and render its final order
on the merits and upon that record. Id. at 3.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, 61-502,
and 61-503. The Commission is vested with the power to "supervise and regulate every public
utility in the state and to do all things necessary to carry out the spirit and intent of the [Public
Utilities Law]."Idaho Code§ 61-501.The Commission is empowered to investigate rates,charges,
rules,regulations,practices,and contracts of public utilities and to determine whether they are just,
reasonable,preferential,discriminatory,or in violation of any provision of law,and to fix the same
by order. Idaho Code §§ 61-502 and 61-503.
PPA
Having reviewed the Application and all submitted materials,the Commission finds it fair,
just, and reasonable to approve the 35-year PPA between the Company and Jackalope Wind.
CPCN
Public utilities shall "furnish, provide and maintain such service, instrumentalities,
equipment and facilities as shall promote the health,safety,comfort and convenience of its patrons,
employees and the public, and as shall be in all respects adequate, efficient,just and reasonable."
Idaho Code § 61-302.
Before constructing "a line, plant, or system," a public utility providing electrical service
must obtain a CPCN from the Commission establishing that the "public convenience and
necessity" requires it. Idaho Code § 61-526. Pursuant to Idaho Commission Rule of Procedure
112, existing utilities applying for the issuance a CPCN under Idaho Code § 61-526 must submit
any relevant data including: (1) a Statement and Explanation; (2) a Description of Construction or
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Expansion; (3) a Map; (4) a Financial Statement and Construction Timelines; and (5) Cost
Estimates and Revenue Requirements.
Having reviewed the Application,the record,the comments of the parties,and all submitted
materials, the Commission finds that the Company has satisfied the requirements for a CPCN to
acquire 300 MW of generation to meet an identified capacity deficiency in 2027. See Idaho Code
§ 61-526; Rule 112. The Commission believes the Company has adequately shown that a capacity
deficiency will exist in 2027, and that the Company, and the public interest, has a need to meet
that deficiency that warrants a CPCN.
Cost Recovery, PTCs, and Load Growth
Both Staff and IIPA expressed significant concerns regarding various aspects of cost
recovery and what, if any, of the PTCs the Company included in its cost calculations will actually
be available for the Company given the new Presidential Administration. The Company has
expressly not requested ratemaking treatment in this case(Application at 11), and in this Order the
Commission makes no findings nor conclusions on the issues of recovery.
However, given the seriousness of the issues presented, the Commission must provide the
Company with as much information as possible. The Commission's approval of this Application
is based upon the representations of the Company in the record for this case. The Company
represents that it will receive the necessary permitting,and that the Company will receive the PTCs
as expected to support the costs of the Jackalope Project as represented to the Commission in the
Application. If both of those factors were not present, the Commission would not find it fair,just,
and reasonable to approve the Application.
The Company argues that: "[i]n the unlikely event,however,that PTCs associated with the
Jackalope Project are eliminated, it is inappropriate to shift the financial risk to Idaho Power...."
Company Reply Comments at 7. The Commission disagrees. The alternative to placing the
financial risk on the Company is to impose that risk upon the Company's customers; individuals
and business who, to a large extent, have no say in the Company's operations, no voice in the
Company's decision-making process, and no input into the Company's specific resource
acquisition decisions or the timing of those decisions other than right here in this case, wherein
those voices are raised in opposition.
The Company presents the example of the Langley Gulch power plant case(IPC-E-12-14)
and maintains that the Jackalope Project was identified as the least-cost, least-risk resource
ORDER NO. 36659 7

addition based on the information known at the time, and that the Commission may not use
"hindsight"to judge the reasonableness of issuing a CPCN.Id. at 5-6. The Company's comparison
is misplaced. The Langley Gulch case cited by the Company concerned the ratemaking treatment
provided to the Company in the initial CPCN Order for the Langley Gulch plant and subsequent
circumstances weighing on the initial binding rate base treatment for its capital investment. Order
No. 32585 (citing Order No. 30892). In this case, at the request of the Company, the Commission
is not providing any ratemaking treatment, and there is no "hindsight" involved as all parties are
aware of the potential future cost recovery issues raised and the potential threats to the financial
models that lead to the Jackalope Project being selected from the RFP. The circumstances present
in the Langley Gulch case are not present here and will not be present during any future cost
recovery proceeding for the items in this case.
As an additional issue, the Commission is aware of the Company's load growth forecast
and the ever-increasing capacity deficiencies it causes, and the Commission shares the concerns
presented in this case, and others, regarding the effects that expected load growth has on the
Company's acquisition process and the resources selected. While the Commission recognizes that
the Company has a duty to serve customers, including large loads,upon request, that duty may be
subject to the physical and practicable limitations of resource acquisition and development that
might necessitate more practical development times to insure that the Company's system and
customers do not suffer under expedited load growth that could otherwise be facilitated and more
gradually implemented.
Company's Obiection
With respect to the Company's objection to IIPA's additional pleadings, the Commission
does not find it necessary to strike the pleading from the record as the information contained is
merely duplicative of IIPA's initial comments. However, all parties are directed to comply with
the Commission's procedural orders. Requests for additional briefing not contemplated by
Commission order must be made by motion.
ORDER
IT IS HEREBY ORDERED that the 35-year PPA between the Company and Jackalope
Wind, LLC is approved.
IT IS FURTHER ORDERED that the Company's Application for a CPCN to acquire 300
MW of generation to meet an identified capacity deficiency in 2027 is granted.
ORDER NO. 36659 8

IT IS FURTHER ORDERED that the Company shall use a 30-year life expectancy for
accounting purposes and for future IRP modeling for the BTA.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon this Order regarding any
matter decided in this Order. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. Idaho Code §§ 61-626
and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 27th day of
June 2025. /
G
EDWARD LODGE, PR_ DENT
R. HAMMOND JR., COMMISSIONER
DAYN HA IE, COMMISSIONER
ATTEST:
M A Ma f B a i s- c h e z
Commission Secretary
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ORDER NO. 36659 9