20250630Direct M. Eldred Exhibits.pdf

RECEIVED
June 30, 2025
BEFORE THE IDAHO PUBLIC
"T" 'TIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S APPLICATION FOR ) CASE NO. IPC-E-24-44
APPROVAL OF A SPECIAL )
CONTRACT AND TARIFF )
SCHEDULE 28 TO PROVIDE )
ELECTRIC SERVICE TO MICRON )
IDAHO SEMICONDUCTOR )
MANUFACTURING (TRITON) LLC )
DIRECT TESTIMONY OF MICHAEL ELDRED
IDAHO PUBLIC UTILITIES COMMISSION
JUNE 30, 2025

1 Q. Please state your name and business address for
2 the record.
3 A. My name is Michael Eldred. My business address
4 is 11331 W. Chinden Blvd. , Building 8, Suite 201-A, Boise,
5 Idaho 83714 .
6 Q. By whom are you employed and in what capacity?
7 A. I am employed by the Idaho Public Utilities
8 Commission ("Commission") as a Utilities Analyst II in the
9 Utilities Division.
10 Q. Please describe your work experience and
11 educational background.
12 A. Please see Exhibit No . 101 that provides a
13 summary of my work experience and education background.
14 Q. What is the purpose of your testimony in this
15 proceeding?
16 A. The purpose of my testimony is to address : (1) my
17 overall concerns with the Special Contract; (2) the upfront
18 cost of the specific infrastructure necessary to provide
19 service to the Micron memory manufacturing fabrication
20 complex ("Micron FAB") ; (3) the pricing components included
21 in the Special Contract and the Company' s No-Harm analysis
22 along with future rate case treatment; (4) Other Special
23 Contract terms to ensure costs are not borne by other
24 customers; and (5) the Power Cost Adjustment ("PCA")
25 accounting treatment .
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1 Q. How is your testimony structured?
2 A. My testimony is subdivided into the following
3 sections :
4 I . Overall Concerns and Focus of Review Page 2
5 II . Summary of Recommendations Page 3
6 III . Micron FAB Upfront Costs Page 4
7 IV. Pricing Structure Page 5
g V. Pricing of Energy Page 9
9 VI . Pricing of Demand Page 12
10 VII . No-Harm Analysis Page 19
11 VIII . Other Special Contract Terms Page 21
12 IX. PCA Accounting Treatment Page 23
13 X. Final Conclusions and Recommendations Page 23
14 I . Overall Concerns and Focus of Review
15 Q. Please explain your overall concerns with the
16 proposed Special Contract .
17 A. I am concerned with the potential cost impact on
18 other customers as a result of the large amount and cost of
19 resources that will be required to provide service to the
20 Micron FAB. My concerns are twofold.
21 First, if the Micron FAB forecasted load does not
22 materialize, the Company' s other customers could be
23 required to pay for the costs .
24 Second, due to the high amount of capacity required to
25 meet the Micron FAB load, there is a potential for other
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1 customers to incur the higher cost of incremental resources
2 when compared to the resources currently serving customers .
3 Due to these concerns, my review prioritized protecting the
4 Company' s other customers from these types of risks .
5 Q. Please explain how these concerns influenced your
6 review of the proposal in the Application.
7 A. My review of the Application in this case
8 prioritized protecting other customers and making sure that
9 the risks associated with the proposal are ultimately borne
10 by Micron.
11 Q. Please explain your primary focus areas for
12 review of the Company' s Application in this case .
13 A. My evaluation focused on the following areas : (1)
14 The upfront cost of the Micron FAB' s specific
15 infrastructure necessary to provide service; (2) the
16 pricing components and No-Harm analysis along with future
17 rate case treatment; (3) other Special Contract terms that
18 ensure costs are not borne by other customers; and (4) the
19 PCA accounting treatment .
20 II . Summary of Recommendations
21 Q. Can you summarize your conclusions and
22 recommendations?
23 A. First, I recommend that the Company isolates the
24 effect of new special contract customers when cost
25 allocation and rates need to be set for these customers in
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1 future general rate cases, and develop methods to ensure
2 other customers are not harmed.
3 Second, I recommend the Commission approve the
4 proposed Special Contract contingent on modifications to
5 the contract terms related to : (1) the Marginal Cost-Based
6 Energy Charges; and (2) the Minimum Monthly Billing Demand,
7 as proposed in my testimony.
8 Third, I recommend the Commission approve the
9 Company' s proposed method for determining the Marginal
10 Cost-Based Energy Charge and order the Company to update
11 the Energy Charge included in the proposed Schedule 28
12 tariff through a compliance filing.
13 Fourth, I recommend the Commission approve the
14 Company' s proposed method for determining the Demand
15 Charges and order the Company to update the Demand Charges
16 included in the proposed Schedule 28 tariff through a
17 compliance filing.
18 Finally, I recommend the Commission approve the
19 PCA accounting treatment proposed in the Application.
20 III . Micron FAB Upfront Costs
21 Q. Please explain the upfront costs of the Micron
22 FAB necessary to provide service .
23 A. The upfront costs necessary to provide service to
24 the Micron FAB include all the design work, engineering,
25 materials, equipment, and construction necessary to connect
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1 the Micron FAB to the Company' s system. These costs
2 include the distribution, substation, and transmission
3 facilities .
4 Q. Please explain how these upfront costs are being
5 paid for.
6 A. Micron is responsible for paying for all upfront
7 costs as provided in the Procurement and Construction
8 Agreements included with the Application.
9 Q. Please summarize your conclusions as a result of
10 your review of the Procurement and Construction Agreements
11 and the upfront costs included in these Agreements .
12 A. I support the terms included in the Agreements .
13 I believe the terms will ensure the Company recovers the
14 appropriate upfront infrastructure costs necessary to
15 connect the Micron FAB to the system. The terms included
16 in the Agreements are consistent with other large load
17 customer' s requests . If additional facilities are required
18 to meet the Micron FAB demand, the Special Contract in
19 Section 6 . 1 includes a term that requires a separate
20 construction agreement to be created that will ensure
21 Micron pays for these costs .
22 IV. Pricing Structure
23 Q. Please summarize the Company' s proposed pricing
24 structure .
25 A. The Company' s proposal includes four types of
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1 charges to recover the cost of service of the Micron FAB:
2 a marginal cost of energy per kilowatt-hour ("kWh") Energy
3 Charge, and three types of cost per kilowatt ("kW") Demand
4 Charges . The Demand Charges include a Monthly Contract
5 Demand Charge, a Monthly Billing Demand Charge, and a Daily
6 Excess Demand Charge . The Energy Charge is not based on
7 time or season and is proposed to be updated annually. The
8 Demand Charges are proposed to be based on embedded costs
9 using the most recently approved cost of service
10 information.
11 Q. Do you support the overall pricing structure?
12 A. I generally support it . Typically, costs are
13 classified based on three cost classifications : customer,
14 demand, and energy. Schedule 28 is a single customer, and
15 most of the customer-related costs will be recovered
16 directly through payments for the up-front infrastructure
17 costs discussed earlier. The two remaining cost
18 classifications, energy and demand, are both system costs
19 that are allocated to each of the Company' s customer
20 classes . I believe the proposed set of charges are
21 adequate to allow the Company to recover the costs that
22 Micron' s load will cause to the Company' s system if the
23 billing determinants, costs, and benefits are matched to
24 the proper test year in future general rate cases .
25 Furthermore, I believe costs won' t be shifted to other
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1 customers if allocated based on cost causation and if my
2 other recommendations are approved.
3 Q. Can you expand on issues related to the test year
4 and matching of costs, benefits, and loads?
5 A. The Company plans to include Schedule 28 in a
6 future rate case test year and allocate Micron' s applicable
7 share in a class cost of service study to derive the Demand
8 Charges . The Company also anticipates a "known and
9 measurable" adjustment be applied to the test year to
10 account for the Micron FAB' s billing determinants during
11 the schedule ramp period. See Exhibit 102 : Response to
12 Staff' s Production Request No . 4 .
13 I believe the Company' s anticipated treatment is
14 reasonable at this time but should be evaluated at the time
15 the rate case happens . Evaluation of the adjustment to the
16 billing determinants used in the test year and the loads
17 used to allocate costs should be a high priority. The
18 incremental resources procured to serve the Micron FAB will
19 likely be brought online prior to being needed to serve
20 Micron' s load and at a higher cost than current embedded
21 resource costs .
22 Q. Can you expand on issues related to cost
23 allocation and cost causation?
24 As seen later in my testimony, I believe the
25 Company is properly addressing how rates will be set for
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1 the cost of energy if my additional recommendations are
2 approved. However, I believe there are some outstanding
3 issues that will need to be addressed related to the cost
4 of demand or capacity.
5 Average embedded cost allocation for demand works
6 to fairly allocate costs between customer classes when
7 growth occurs relatively evenly across each of the classes .
8 If higher-priced transmission and generation resources, on
9 a per kW basis, are obtained to meet the overall growth in
10 load, all classes receive a share of those higher cost
11 resources, which should result in a fair allocation of
12 costs .
13 However, if a single class has significantly
14 higher load growth than the other classes the additional
15 load will result in higher cost resources, on a per kW
16 basis, than the Company' s existing resources . The average
17 embedded cost will go up but will likely affect the class
18 experiencing load growth differently than the other
19 classes . The class with load growth will get a share of
20 the lower-cost existing resources, while the classes
21 without load growth will see an increase aligned with the
22 increased average embedded cost .
23 This issue highlights the question of what cost
24 causation is, especially given the unequal rates of growth
25 between the classes and which classes may be affecting
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1 system costs unequally. I believe this issue will continue
2 to be important as the number of large-load customers, who
3 drive in a large amount of "system" resources and seek
4 electric service through special contracts are projected to
5 increase in the near future . Although I have not
6 quantified the effect of this issue, I recommend that the
7 Company isolate the effect of this dynamic when cost
g allocation and rates need to be set for these customers in
9 future general rate cases and develop methods to ensure
10 other customers are not harmed.
11 V. Pricing of Energy - Marginal Cost-based Energy Charge
12 Q. Please provide your conclusions regarding the
13 Marginal Cost-Based Energy Charge included in Section 7 .2
14 of the Special Contract .
15 A. I currently support the Company' s proposed method
16 and annual update included in the Application for
17 determining the Marginal Energy Charges, but I have
18 concerns with the language included in Section 7 .2 of the
19 Special Contact . I have concerns about the ability to
20 change this method if a different method is adopted in the
21 future and the language related to reevaluating the basis
22 for the Energy Charges after the scheduled ramp period
23 ends . Due to these concerns, I am recommending
24 modifications to the terms in the Special Contract for the
25 Marginal Cost-Based Energy Charge .
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1 Q. Please explain the Marginal Cost-Based Energy
2 Charge term included in Section 7 .2 of the Special
3 Contract .
4 A. Section 7 .2 of the Special Contract states the
5 following:
6 Marginal Cost-Based Energy Charges . Schedule 28 shall
include the marginal cost-based energy charges (the
7 "Energy Charges") . The Energy Charges will be subject
8 to IPUC approval and Idaho Power shall provide IPUC
with updated Energy Charges annually. At Micron' s
9 request, Idaho Power agrees to reevaluate the basis
for the Energy Charges after the scheduled ramp period
10 ends on September 30, 2030 .
11 I believe the language included in this term
12 should be modified to address potential changes in the
13 method used to determine the Energy Charges and address
14 requirements for changing the basis for the Energy Charges .
15 Q. Please provide your recommendations for modifying
16 the terms regarding the Marginal Cost-Based Energy Charges .
17 A. I recommend the language in the term explicitly:
18 (1) Allow the ability to update the method used to
19 determine the Energy Charges; and (2) State a requirement
20 for Commission approval and justification for moving from
21 Marginal Cost-Based Energy Charges to Energy Charges based
22 on an embedded rate or another basis after the scheduled
23 ramp period that will not shift costs to other customers .
24 Q. Please explain why language regarding the ability
25 to update the method used to determine Energy Charges is
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1 necessary.
2 A. In Commission Order No . 33619, the Commission
3 ordered the Company to work with Staff to evaluate the two
4 current methods for determining marginal cost rates used in
5 other Schedules . If it is determined that the methods
6 should be changed as a result of such an evaluation, the
7 Special Contract should allow for that to occur in order to
8 maintain accurate Marginal Cost-Based Energy Charges .
9 Q. Please explain why Commission approval and
10 justification is needed prior to moving away from a
11 Marginal Cost-Based Energy Charge to an embedded energy
12 rate?
13 A. I believe requiring Commission approval is
14 necessary because the Marginal Cost-Based Energy Charge is
15 one of the major components of the Special Contract that is
16 mitigating the risk of higher costs caused by Micron' s
17 incremental load from being passed to other customers . The
18 Company should be required to show that changing from a
19 marginal cost basis to an embedded cost basis will not harm
20 other customers .
21 The energy cost at the margin represents the
22 incremental cost of energy the Company will incur to serve
23 Micron' s incremental load being added to the Company' s
24 system. Energy costs at the margin are higher than the
25 average embedded cost . Micron' s loads are the cause of
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1 these incremental costs, and pricing Micron' s energy at the
2 margin should shield the Company' s other customers from
3 these higher costs .
4 Q. Do you have any other recommendations regarding
5 the Marginal Cost-Based Energy Charge .
6 A. Yes . The Monthly Energy Charge included in the
7 proposed Schedule 28 is based on expectations from April
8 2024 through March 2025 to determine the marginal energy
9 rate . I believe the Monthly Energy Charge should be
10 updated to reflect a marginal energy rate based on
11 expectations from April 2025 through March 2026 similar to
12 the marginal energy rates approved in Case No . IPC-E-25-17 .
13 I recommend the Commission approve the Company' s proposed
14 method for determining the Marginal Cost-Based Energy
15 Charge and order the Company to update the Energy Charge
16 included in the proposed Schedule 28 tariff through a
17 compliance filing to reflect a marginal energy rate based
18 on expectations from April 2025 through March 2026 similar
19 to the marginal energy rates approved in Case No . IPC-E-25-
20 17 .
21 VI . Pricing of Demand - Demand Charges
22 Q. Please describe the three different Demand
23 Charges included in the proposed Schedule 28 tariff.
24 A. The Company is proposing a Monthly Contract
25 Demand Charge, a Monthly Billing Demand Charge, and a Daily
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1 Excess Demand Charge . The Monthly Contract Demand Charge
2 and Monthly Billing Demand Charge are based on the embedded
3 capacity costs that would be allocated to the Micron FAB
4 consistent with the Company' s cost of service method used
5 in the 2023 general rate case settlement stipulation
6 approved by the Commission in Case No . IPC-E-23-11 .
7 The Monthly Contract Demand Charge is based on
8 the Company' s Open Access Transmission Tariff ("OATT") rate
9 effective October 1, 2022 . This OATT-based rate represents
10 the cost to reserve capacity on the Idaho Power System.
11 Anderson Direct at 8 .
12 The Monthly Billing Demand Charge represents the
13 remaining embedded capacity costs that are not collected
14 through the Monthly Contract Demand Charge . The Billing
15 Demand Charge is determined by removing the revenue that
16 will be received through the Monthly Contract Demand from
17 the total embedded capacity costs allocated to the Micron
18 FAB consistent with the 2023 cost of service study. The
19 remaining costs are collected through the Billing Demand
20 Charge .
21 The Daily Excess Demand Charge represents the
22 revenue that should be received for the incremental demand
23 above the Contract Demand. The Daily Excess Demand Charge
24 occurs when the Billing Demand is in excess of the Contract
25 Demand and the Company decides to make power available to
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1 satisfy the Excess Demand. Special Contract at 11 .
2 Q. What are your conclusions on the Company' s
3 proposed Demand Pricing Components?
4 A. I recommend the Commission approve the Company' s
5 proposed method for determining the Demand Charges and
6 order the Company to update the Demand Charges included in
7 the proposed Schedule 28 tariff through a compliance filing
8 to reflect the aggregate Special Contract percentage
9 revenue increase authorized by the Commission in Case No .
10 IPC-E-24-07 .
11 I believe both the proposed Energy and Demand
12 Charges are reasonable when compared to recently approved
13 special contracts (Schedules 33 and 34) . However, the
14 amount of additional capacity required to serve the Micron
15 FAB does create concerns whether Micron will pay their fair
16 share of costs with the proposed contract rates and if it
17 will impact other customers as discussed earlier.
18 Q. Please explain why you recommend the Demand
19 Charges in the proposed Schedule 28 tariff needs to be
20 updated.
21 A. The Company, in Paragraph 19 of the Application,
22 proposed adjusting the Billing Demand and Contract Demand
23 Charges in Schedule 28 to reflect any changes approved in
24 the general rate case in Case No . IPC-E-24-07 . In the
25 Company' s supplemental response to Staff Production Request
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1 No . 1, the Company provided updated Billing Demand and
2 Contract Demand Charges in Attachment 8 to this
3 supplemental response . I have reviewed the proposed Demand
4 Charges and recommend the Demand Charges included in the
5 proposed Schedule 28 tariff be updated to reflect these
6 updated Demand Charges if the proposed method for
7 determining the Demand Charges is approved by the
8 Commission.
9 Q. Please provide the terms related to demand in the
10 Special Contract that mitigates risk to other customers .
11 A. The Special Contract terms related to demand that
12 mitigate risk to other customers are the Contract Demand
13 and Minimum Monthly Billing Demand terms included in
14 Section 5 of the Special Contract . These terms, also
15 referred to as take-or-pay provisions, help to cover the
16 incremental cost to serve the Micron FAB.
17 Q. Please provide your conclusions regarding the
18 Contract Demand and Minimum Monthly Billing Demand terms in
19 the Special Contract .
20 A. I support the Contract Demand and Minimum Monthly
21 Billing Demand terms included in the Special Contract but
22 do not believe they go far enough to protect other
23 customers . I believe one of the largest risks with this
24 Special Contract is the forecasted load not materializing
25 as expected.
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1 Sections 5 .2a and 5 . 3a of the Special Contract
2 include terms that limit the ability of Micron to adjust
3 the Contract Demand during and after the scheduled ramp
4 period. While these terms provide some risk mitigation
5 against changing load forecasts, I believe additional
6 protection is required after the scheduled ramp period to
7 ensure Micron continues to pay for the incremental
8 resources required to serve them.
g To provide additional protection, I recommend
10 Section 5 . 5 (b) of the Special Contract that includes
11 proposed reductions to the Minimum Monthly Billing Demand
12 be modified.
13 Q. Please explain the proposed reductions to the
14 Minimum Monthly Billing Demand included in Section 5 . 5 of
15 the Special Contract .
16 A. Section 5 . 5 (b) of the Special Contract states the
17 following:
18 Minimum Monthly Billing Demand After Expansion. On the
effective date of the Embedded Contract Demand, the
19 Minimum Monthly Billing Demand will decrease by 30 MW
20 from the then-effective Minimum Monthly Billing
Demand. Thereafter, Minimum Monthly Billing Demand
21 will automatically reduce by 30 MW on June 1 of each
year down to a minimum of 20 MW.
22
23 The effective date of the Embedded Contract
24 Demand is October 1, 2030, as set forth in Exhibit 3 of the
25 Special Contract . The proposed Embedded Contract Demand
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1 agreed to in the Special Contract is 474 megawatts ("MW")
2 in the Non-Summer Season and 507 MW in the Summer Season.
3 These Embedded Contract Demands are allowed to be changed
4 with at least twelve months prior notice to the Company but
5 cannot be increased or decreased more than 30 MW compared
6 to the previous season, and in no event can it increase
7 above 507 MW. Special Contract at Section 5 . 3 (a) . The
g Minimum Monthly Billing Demand is based on the Micron FAB
9 load ramp projections and coincident to the requested
10 Contract Demand. Special Contract at Section 5 . 5 .
11 The proposed reductions to the then-effective
12 Embedded Contract Demand will decrease 30 MW on October 1,
13 2030 and continue to decrease on June 1 each year until it
14 reaches the 20 MW minimum. I believe this reduction to the
15 Minimum Monthly Billing Demand should be modified.
16 Q. Please provide your recommendations for modifying
17 the proposed reduction to the Minimum Monthly Billing
18 Demand.
19 A. I recommend that the Minimum Monthly Billing
20 Demand should not be reduced per the schedule as stipulated
21 in Section 5 . 5 (b) of the Special Contract, until it can be
22 shown that the Micron FAB has reached steady-state . I
23 recommend that reductions in the Minimum Monthly Billing
24 Demand should be revisited 5 years after the effective date
25 of the Embedded Contract Demand. This modification would
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1 extend the take-or-pay provisions by 5 years . If at that
2 time, Micron can show stable loads and stability of
3 revenue, the reductions in the Minimum Monthly Billing
4 Demand can begin at that time based on the schedule in the
5 proposed Special Contract .
6 Q. Please explain why this additional level of
7 protection is necessary.
8 A. I have several reasons for this additional level
9 of protection. The first reason is this 5-year extension
10 of the take-or-pay provision helps to ensure Micron is
11 paying for the resources they are driving into the system,
12 especially since many of these resources have useful lives
13 of 20 years or more .
14 The second reason for this additional protection
15 is if the Micron FAB loads do not materialize as planned,
16 it allows the Company time to identify efficient use for
17 the incremental resources obtained to meet the Micron FAB
18 load that did not materialize . It also allows the Company
19 to verify if revenue from other sources of load growth is
20 utilizing and providing adequate recovery for the
21 incremental resources .
22 The third reason for this additional protection
23 is it allows time to verify that the Micron FAB has reached
24 a steady-state load that will ensure continued recovery of
25 the incremental resources .
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I VII . No-Harm Analysis
2 Q. Please describe the purpose of the No-Harm
3 analysis .
4 A. The purpose of the No-Harm analysis is to
5 determine if allocating a share of the embedded and
6 incremental demand-related system costs to Micron will harm
7 other customers .
g Q. Please provide your conclusions regarding the
9 Company' s No-Harm analysis .
10 A. I believe the Company' s input assumptions and
11 evaluation of risk variables used in the No-Harm analysis
12 were reasonable based on the information known at the time
13 the analysis was performed. However, the result is based
14 on a modeled forecast and a large number of assumptions,
15 without a clear understanding of how the Company' s "No-
16 Harm" conclusion can change when those assumptions deviate
17 from reality. If conditions in the future do not play out
18 as assumed in the analysis, it has the potential to result
19 in cost shifting to other customers .
20 Due to these concerns, I did not rely exclusively
21 on the results of the No-Harm analysis as my primary
22 consideration in determining if the rates proposed in the
23 Special Contract are reasonable .
24 Q. Please provide some examples of concerns with the
25 analysis .
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1 A. My strongest concerns include : (1) the Micron FAB
2 load not materializing as assumed in the No-Harm analysis,
3 especially during the steady state period; (2) the cost of
4 future resources increasing significantly over the cost
5 assumed in the analysis; and (3) potential changes to the
6 cost allocation methods .
7 If the Micron FAB load does not materialize as
g assumed, it could result in the Company procuring resources
9 that are not required. This possibility and the extent to
10 which it would affect the results and conclusions of the
11 No-Harm analysis, were not considered. However, the
12 Special Contract does mitigate some of this risk by
13 limiting the amount and time frame when Micron can change
14 the Contract Demand, Scheduled Ramp Contract Demand, and
15 Embedded Contract Demand.
16 The potential for future resources to increase in
17 cost significantly over the values assumed in the analysis
18 is another uncertainty that could change the No-Harm
19 analysis conclusions . Changing resource costs are a strong
20 possibility, especially given uncertainty in the cost of
21 resources that have occurred over the past five years and
22 conditions that continue to persist given the uncertainty
23 in current federal economic policies .
24 Potential changes in the cost-of-service
25 allocation method in future rate cases could also change
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1 the results and conclusions of the No-Harm analysis . There
2 is no way to know how the conclusions would change given
3 the myriad of ways the cost-of-service allocations could
4 change . For example, the Company is proposing a
5 modification to the allocation of the Company' s demand-
6 classified production costs in the recently-filed General
7 Rate Case, Case No . IPC-E-25-16 . Maloney, Direct at 8 .
8 VIII . Other Special Contract Terms
9 Q. Please provide other important Special Contract
10 terms that mitigate risk to other customers .
11 A. The Special Contract contains several important
12 terms that mitigate risk including: (1) Termination
13 Payments to ensure Micron is liable for the remaining
14 financial obligation related to making Contract Demand
15 available (Section 3) ; (2) Security and Credit Support to
16 cover any obligations under the Special Contract (Section
17 10) ; and (3) Commission Jurisdiction terms that provides an
18 opportunity for adjusting rates if it appears the approved
19 rates are not collecting a reasonable amount from the
20 Micron FAB Special Contract (Section 13) .
21 Q. Please summarize your conclusions as a result of
22 your review of these Micron FAB Special Contract terms .
23 A. I generally support all the terms included in the
24 Micron FAB special contract that mitigate risk to the
25 Company and other customers . The Special Contract includes
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1 stronger terms or terms not included in the Company' s
2 previous special contracts . Based on my review of these
3 terms, I believe these terms adequately mitigate risk to
4 other customers .
5 The Termination Payments terms provide a detailed
6 process for notice, cause, payment, and other items related
7 to termination of the Special Contract . These terms are
g important to protect other customers in case the Special
9 Contract is terminated by Micron and provides a reasonable
10 approach for the Company to recover damages caused by the
11 termination.
12 The Security and Credit Support terms require
13 Micron to provide a guaranty within ten business days after
14 the execution date of the Special Contract . It also
15 requires Micron to provide a replacement Letter of Credit
16 or cash if it is downgraded to no longer being a
17 "Creditworthy Entity. " These terms help ensure the Company
18 recovers any damages or obligations from Micron.
19 The Commission Jurisdiction terms state the
20 Special Contract is subject to Idaho Power' s General Rules
21 and Regulations and the regulatory authority of the
22 Commission and laws of the State of Idaho . Special
23 Contract at Section 13 . 1 . The Contract also states :
24 The rates under this Agreement are subject to change
25 and revision by order of the IPUC upon a finding,
supported by substantial competent evidence, that such
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rate change or revision is just, fair,
1 reasonable, sufficient, non-preferential, and
2 nondiscriminatory.
3 Special Contract at Section 13 .2 .
4 These terms are important to ensure the rates in the
5 Special Contract can change if the rates are not collecting
a reasonable amount from the Micron FAB.
6
7 IX. PCA Accounting Treatment
8 Q. Please describe the Company' s proposed PCA
9 accounting treatment .
10 A. The Company is proposing that the PCA rate will
11 not apply to Micron' s Marginal Cost-Based Energy Sales .
12 All the costs of supplying power for Marginal Cost-Based
13 Energy will be included in the PCA and energy-based
14 revenues from Micron will be treated as surplus sales and
15 an offset to power supply costs . Application at 9 .
16 Q. What is your recommendation to the Commission
17 regarding the Company' s proposed PCA accounting treatment?
18 A. I recommend the Commission approve the Company' s
19 proposed PCA accounting treatment . I support the proposed
20 accounting treatment because it prudently allocates costs
21 for serving the Micron FAB and is consistent with other
22 special contracts and Schedules that use marginal cost
23 energy rates .
X. Final Conclusions and Recommendations
24
25 Q. Please list all of your recommendations included
CASE NO. IPC-E-24-44 ELDRED, M. (Di) 23
6/30/25 STAFF

1 in your testimony.
2 A. First, I recommend that the Company isolates the
3 effect of new special contract customers when cost
4 allocation and rates need to be set for these customers in
5 future general rate cases, and develop methods to ensure
6 other customers are not harmed.
7 Second, I recommend the Commission approve the
8 proposed Special Contract contingent on my proposed
9 modifications to the contract terms related to : (1) the
10 Marginal Cost-Based Energy Charges; and (2) the Minimum
11 Monthly Billing Demand.
12 Third, I recommend the language in the Special
13 Contract regarding the Marginal Cost-Based Energy Charges
14 explicitly: (1) Allow the ability to update the method used
15 to determine the Energy Charges; and (2) state a
16 requirement for Commission approval and justification for
17 moving from a Marginal Cost-based Energy Charge to an
18 Energy Charge based on an embedded rate or other basis
19 after the scheduled ramp period. The justification should
20 show that the change in basis will not shift costs to other
21 customers .
22 Fourth, I recommend the Commission approve the
23 Company' s proposed method for determining the Marginal
24 Cost-Based Energy Charge and order the Company to update
25 the Energy Charge included in the proposed Schedule 28
CASE NO. IPC-E-24-44 ELDRED, M. (Di) 24
6/30/25 STAFF

1 tariff through a compliance filing to reflect a marginal
2 energy rate based on expectations from April 2025 through
3 March 2026 similar to the marginal energy rates approved in
4 Case No . IPC-E-25-17 .
5 Fifth, I recommend the Commission approve the
6 Company' s proposed method for determining the Demand
7 Charges and order the Company to update the Demand Charges
8 included in the proposed Schedule 28 tariff through a
9 compliance filing to reflect the aggregate Special Contract
10 percentage revenue increase authorized by the Commission in
11 Case No . IPC-E-24-07 .
12 Sixth, I recommend that the Minimum Monthly
13 Billing Demand should not be reduced, per the schedule as
14 stipulated in Section 5 . 5 (b) of the Special Contract, until
15 it can be shown that the Micron FAB has reached a steady
16 state . Instead, I recommend that reductions in the Minimum
17 Monthly Billing Demand should be revisited 5 years after
18 the effective date of the Embedded Contract Demand. If at
19 that time Micron can show stable loads and stability of
20 revenue, the reductions in the Minimum Monthly Billing
21 Demand can begin at that time based on the schedule in the
22 proposed Special Contract .
23 Finally, I recommend the Commission approve the
24 PCA accounting treatment proposed in the Application.
25 Q. Does this conclude your testimony in this
CASE NO. IPC-E-24-44 ELDRED, M. (Di) 25
6/30/25 STAFF

I proceeding?
2 A. Yes, it does .
3
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8
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10
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CASE NO. IPC-E-24-44 ELDRED, M. (Di) 26
6/30/25 STAFF

Professional Qualifications
Of
Michael Eldred
Utilities Analyst II - Engineering
Idaho Public Utilities Commission
EDUCATION
Mr. Eldred graduated with honors from Boise State University
with a bachelor' s degree in Mechanical Engineering in 2014 and a
master' s degree in Business Administration in 2016 . In addition
to his formal education, he has attended the Institute of Public
Utilities Annual Regulatory Studies Program at Michigan State
University, attended Michigan State University' s NARUC Utility
Rate School, EUCI Cost of Service and Rate Design Courses, and
NWPPA Advance Rate Design and Cost of Service Courses .
BUSINESS EXPERIENCE
Mr. Eldred has worked with the Commission as a Utilities
Analyst since 2017 . He has reviewed and provided recommendations
to the Commission in a wide variety of cases due to his extensive
knowledge, skills, and abilities . Some examples of cases he has
processed include : (1) reviewing and providing recommendations on
cost of service studies, consumption normalization, and rate
design proposals in general rate cases; (2) conducting analyses
and providing recommendations on electricity and natural gas
prices in general rate cases; (3) conducting prudence reviews and
providing recommendations on capital investments in general rate
cases and Certificate for Public Convenience and Necessity cases;
(4) providing technical advice on integrated resource plans for
various utilities; and (5) reviewing and providing recommendations
on utilities cost recovery mechanisms .
Exhibit No . 101
Case No . IPC-E-24-44
M. Eldred, Staff
6/30/25

REQUEST FOR PRODUCTION NO. 4: Please explain how the Company plans
to incorporate Schedule 28 into future rate cases.
RESPONSE TO REQUEST FOR PRODUCTION NO. 4: The Company would
include Schedule 28 in a future general rate case test year and allocate the applicable
share in a class cost-of-service study to derive the Demand Charges. While the Company
has not yet identified the exact method, it anticipates proposing a "known and
measurable" adjustment be applied to the test year to account for the Micron FAB billing
determinants during the scheduled ramp period.
The response to this Request is sponsored by Grant T. Anderson, Idaho Power
Company.
Exhibit No . 102
Case No . IPC-E-24-44
M. Eldred, Staff
6/30/25
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER- 8

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 30th DAY OF JUNE 2025, SERVED THE
FOREGOING DIRECT TESTIMONY OF MICHAEL ELDRED, IN CASE NO. IPC-E-24-44, BY
E-MAILING A COPY THEREOF, TO THE FOLLOWING:
MEGAN GOICOECHEA ALLEN CONNIE ASCHENBRENNER
DONOVAN E.WALKER GRANT ANDERSON
IDAHO POWER COMPANY IDAHO POWER COMPANY
PO BOX 70 PO BOX 70
BOISE ID 83707-0070 BOISE ID 83707-0070
E-MAIL:mgoicoecheaallen(i�idahopower.com E-MAIL: caschenbrennerpidahopower.com
dwalker(&idahopower.com gandersonAidahopower.com
dockets(i�idahopower.com
Micron Micron
AUSTIN RUESCHHOFF AUSTIN W JENSEN
THORVALD A NELSON KRISTINE A.K.ROACH
HOLLAND&HART LLP HOLLAND&HART LLP
555 17TH ST STE 3200 555 17TH ST STE 3200
DENVER CO 80202 DENVER CO 80202
E-MAIL: [e-mail] EMAIL: awjensenghollandhart.com
[e-mail] [e-mail]
aclee(&hollandhart.com
Idaho Irrigation Pumpers Ass'n, Inc. Idaho Irrigation Pumpers Assn,Inc.
Eric L.Olsen Lance Kaufman,Ph.D.
Echo Hawk&Olsen,PLLC 2623 NW Bluebell Place
P.O.Box 6119 Corvallis,OR 97330
505 Pershing Ave., Ste. 100 E-MAIL: lance@ae isg insi h
Pocatello,ID 83205
E-MAIL: elogechohawk.com
Industrial Customers of Idaho Power Industrial Customers of Idaho Power
Peter J.Richardson Dr.Don Reading
Richardson Adams,PLLC 280 S. Silverwood Way
515 N.27r1'St. Eagle,ID 83716
Boise,ID 83702 E-MAIL: dreadingga,mindspring.com
E-MAIL: peterArichardsonadams.com
Clean Energy Opportunities for Idaho Clean Energy Opportunities for Idaho
Kelsey Jae Courtney White
920 N.Clover Dr. Mike Heckler
Boise,ID 83703 Clean Energy Opportunities for Idaho
E-MAIL: [e-mail] 3778 Plantation River Dr., Ste. 102
Boise,ID 83703
E-MAIL:
courtney(_cleanenergyopportunities.com
mike(i�cleanenerayopportunities.com
PATRICIA JORDAN
CERTIFICATE OF SERVICE