20250717Staff Comments - Redacted.pdf

RECEIVED
25
CHRIS BURDIN P July 20
IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9810
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S APPLICATION FOR A ) CASE NO. IPC-E-25-08
CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY FOR AN OWNERSHIP )
INTEREST IN THE SOUTHWEST INTERTIE ) REDACTED COMMENTS OF
PROJECT—NORTH 500-KV TRANSMISSION ) THE COMMISSION STAFF
LINE AND APPROVAL OF THE )
UTILIZATION OF CAPACITY ON THE LINE )
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Chris Burdin, Deputy Attorney General,
submits the following comments.
BACKGROUND
On March 7, 2025, Idaho Power Company("Company") filed an application
("Application") with the Commission requesting an order: (1) granting a Certificate of Public
Convenience and Necessity("CPCN") for the Company's ownership interest in the Southwest
Intertie Project—North ("SWIP-North") 500-kilovolt("kV")transmission line, including the
rights to 250 megawatts ("MW") of the northbound capacity, and(2) approving the Company's
utilization of an additional 250 MW of GBT Northbound, LLC's rights to the northbound
capacity, both via the SWIP-North agreements. Application at 1-2.
STAFF COMMENTS I DULY 17, 2025

On April 15, 2025, the Commission issued a Notice of Application and Notice of
Intervention Deadline. Order No. 36541. The Commission granted intervention to Micron
Technology, Inc. and the Idaho Irrigation Pumpers Association, Inc. Order Nos. 36599 and
36537.
STAFF ANALYSIS
Initial Summary
The Company's system faces a series of annual capacity deficits due to very rapid load
growth and Staff believes that obtaining 500 MW of northbound capacity on the SWIP-North
transmission line is a least-cost, least-risk solution that helps reduce the capacity deficits.
Therefore, Staff recommends that the Commission approve the Company's requests as filed.
The System Need
The Company submitted this case based on the assumptions of its 2023 Integrated
Resource Plan ("IRP"), which was the most current plan when the case was filed. During the
ensuing months, the Company filed its 2025 IRP, which uses updated load and resource
assumptions. Staff analyzed the Company's original results using 2023 assumptions and agreed
that the system had a need for additional resources. Staff then analyzed the updated results using
2025 assumptions, and the need for additional resources became even more compelling.
The Company's current capacity position is already on the edge of a deficit. The 2023
IRP forecasted a load growth of approximately 577 MW from 2024 to 2033, which will require
the timely procurement of additional resources. 2023 IRP—Appendix A: Table 11 at 33. The
2025 IRP forecasts even larger load growth of approximately 808 MW from 2026 to 2035. 2025
IRP—Appendix A: Table 8 at 24.
The Company's Supplemental Response to Production Request No. 17 shows that
without SWIP-North the annual capacity deficit will be 123 MW in 2027, 154 MW in 2028, and
384 MW in 2029. This analysis included all the up-to-date load and resource assumptions used
in the 2025 IRP.
Staff agrees with the Company's analysis and Staff believes that additional system
resources will be necessary to maintain system reliability.
STAFF COMMENTS 2 JULY 17, 2025

SWIP-North Agreements
The Company proposes to acquire 500 MW of northbound capacity on the total SWIP
transmission line, which will provide transmission access to the Desert Southwest("DSW")
Market. This acquisition would be governed by multiple agreements, which Staff briefly
summarizes below.
Participation and Joint Ownership Agreement
The Participation and Joint Ownership Agreement outlines the Company's involvement
with the SWIP-North project, schedules, and additional details of the proposed project. This
agreement also contains provisions for disallowed costs for which the Company will not be
responsible. Response to Production Request No. 2.
Purchase Sale Agreement
The Purchase Sale Agreement ("PSA") is the agreement for the Company to purchase
11.4% ownership of SWIP-North, which will provide 250 MW of northbound capacity once
construction is completed. The Company will be financially responsible for the capital
investments and operation and maintenance ("O&M") expenses. Ellsworth Direct at 14. The
PSA includes cost-related provisions such as a reduced build and transfer fee if project
construction costs exceed the agreed budget or if the project does not meet the agreed in-service
date. Response to Production Request No. 2.
Capacity Entitlement Agreement
Great Basin Transmission("GBT") will own 11.4% of SWIP-North, with its capacity
flowing northbound. The Capacity Entitlement Agreement("CEA") will provide the Company
250 MW of northbound capacity for 40 years. Ellsworth Direct at 15. As modeled by the
Company, the price of the CEA will be treated as an O&M expense for the contract term.
Response to Production Request No. 11 —Confidential Attachment. As part of the CEA terms,
the Company is responsible for the O&M expenses associated with the transmission line through
the duration of the contract.
The CEA includes an option for the Company to purchase full ownership interest of
GBT's 11.4% share at year 39 during the capacity entitlement term with the option to extend for
STAFF COMMENTS 3 JULY 17, 2025

12 years or allow the Company to purchase the asset. The purchase price is predetermined as
described on page 15 of Ellsworth's Direct testimony and is documented in the Purchase Option
Agreement.
Second Amended and Restated Transmission Use and Capacity Exchange Agreement
The Second Amended and Restated Transmission Use and Capacity Exchange
Agreement between GBT and NV Energy provides the link that gives the Company
approximately 500 MW of northbound capacity on SWIP-South, for a total of 500 MW across
the total SWIP project. Ellsworth Direct at 12.
The Least-Cost Least-Risk Solution
The Company asserts that SWIP-North is a"cost-effective resource addition necessary to
meet identified capacity deficiencies. Application at 2. In his testimony, Company witness
Ellsworth provides detailed analysis of the SWIP-North cost savings using 2023 IRP
assumptions. The data shows that SWIP-North is cost effective. However, Staff asked for
updated analysis using 2025 IRP assumptions in Production Requests Nos. 4, 5, and 17. In each
response, the data shows that the cost-effectiveness of SWIP-North only increases. Staff outlines
its findings below, using the updated 2025 IRP results.
Cost Benefits
First, Staff agrees with the Company's AURORA analysis that shows a substantial net
present value ("NPV") savings for a resource portfolio with SWIP-North, compared to a resource
portfolio without SWIP-North. Due to the large load growth forecasted from 2028 to 2031, new
resources must be brought online in those years. The Aurora analysis in the Company's
Response to Production Request No. 17 shows that if SWIP-North is omitted, an additional 200
MW gas plant must be procured in 2029 instead. This alternative would result in a
NPV cost increase.
Furthermore, it is highly improbable that this additional 200 MW gas plant could be
procured in 2029. If Aurora is prohibited from adding the gas resource until later, Aurora must
meet the 2028-2031 capacity deficit by building significantly more renewables and battery
energy storage systems (`BESS"). The Company's Response to Production Request No. 5
STAFF COMMENTS 4 JULY 17, 2025

shows that this yields a NPV increase of above the baseline SWIP-North scenario.
This cost differential may be even larger due to the recent passage of the One Big Beautiful Bill
Act ("OBBBA"), which ends the tax credits for solar and BESS.1
Second, the Company's control of SWIP-North capacity would enable it to avoid
additional costs. Company witness Ellsworth describes three avoided costs on pages 68 through
74 of his testimony: 1) The need to build a redundant feed from the Rogerson substation would
be deferred; 2)the need to build the Midpoint to Cedar Hill 500-kV segment of the Gateway
West project would be deferred; and 3) the extra capacity on SWIP-North outside the winter
season could be sold to earn wheeling revenue. Staff believes that the Company accounted for
items 1) and 3) in its cost analysis but omitted item 2). Therefore, Staff believes that item 2), the
deferred cost of the Midpoint to Cedar Hill Gateway West segment, should also be considered an
additional benefit increasing the cost effectiveness of the resource.
Unquantifiable Benefits
The Company lists additional benefits that it did not quantify or include in the
Company's cost-benefit analysis. These include the alleviation of transmission congestion, the
high reliability of transmission lines as a resource, and the increased access to diverse markets to
offset regional price volatility. Staff agrees that these are real benefits and should be considered
as part of the justification.
Finally, Staff believes that the advanced stage of planning, permitting, and funding of
SWIP-North is a valuable benefit. The risk of project delays still exists (and is discussed below),
but the target completion date is realistic. When considering alternative resources, Staff believes
that the acquisition, permitting, and construction timelines of those resources would be
prohibitively long, and the likelihood of those resources being delivered in the year of need is
low. Therefore, Staff considers the SWIP-North path to completion to be a significant benefit as
a reduction in risk when compared to other resource alternatives.
' OBBBA Reshapes Renewable Energy Tax Credits—Key Deadlines
STAFF COMMENTS 5 JULY 17, 2025

Project Risks
Notwithstanding the benefits identified above, Staff identified several risks associated
with SWIP-North and discusses them below.
Desert Southwest Market Capacity
Even if SWIP-North is built, its effectiveness as a winter capacity resource will hinge on
the availability of power from the DSW market. The Company must find one or more willing
companies who can supply 500 MW of power in the winter months.
Company witness Ellsworth discussed this issue in depth on pages 51 through 56 of his
testimony. He asserts that "the DSW market can be relied upon to provide the Company 500
MW of winter resource adequacy capacity via SWIP-North." Ellsworth at 53. The essence of
his justification can be summarized as follows:
1. The DSW utilities are summer-peaking and must build resources to meet the summer
load.
2. This overbuild results in a large winter capacity surplus. Exhibit 7 shows the summer
peak load is approximately 14,000 MW more than the winter peak load.
3. Even though the variable energy resources generate less in the winter, there is still a
large winter surplus across the region.
4. Much of the existing DSW capacity is dispatchable gas, which by itself exceeds the
winter load in some areas.
Staff agrees with these observations. However, the passage of the OBBBA casts new
uncertainty on the issue. The law ends tax credits for new renewable resources, which may
change or reduce the expected resource buildout. This could lead to a reduction in surplus
capacity.
On balance, Staff agrees that even with the OBBBA, proceeding with SWIP-North
remains a reasonable risk due to the likely cost and reliability benefits.
Permitting Risk
The construction of the SWIP-North line still depends on obtaining the necessary
permits. Aside from a few routine state and local permits, two significant permits are still
needed from the Bureau of Land Management(`BLM"). The final Notice to Proceed for SWIP-
STAFF COMMENTS 6 JULY 17, 2025

North is still pending a cultural study that is supposed to be completed in 2025. Also, the BLM
is processing a separate permit to expand the Robinson Summit substation. Ellsworth Direct at
13. The Company assesses the permit risk as low. Response to Production Request No. 8.
Permitting delays would impact the Company's capacity position if the in-service date is delayed
and may cause significant cost increases.
Cost Risk
Staff believes that the Company has made reasonable efforts to reduce cost overrun risks
to ratepayers. This is a large transmission project that has potential to see costs escalate as
construction progresses. As stated earlier, the Company asserts it will not make any payments
until construction is completed and there are provisions for disallowance in the case of cost
overrun and delays. Response to Production Request No. 2. For potential cost overruns, the
total project cost includes a contingency amount that was included in the cost-benefit analysis.
Id.
California Independent System Operator
One of the owners of the proposed SWIP-North transmission line is the California
Independent System Operator("CAISO"). Under the current agreements, CAISO will own
approximately 77 percent of the SWIP-North line. CAISO will be entitled to 572.5 MW of
northbound capacity and 1,117.5 MW of southbound capacity. Ellsworth Direct at 14. Staff
inquired in Production Request No. 3 about the repercussions if CAISO did not fulfill its
agreement with this project. The Company stated if CAISO were to exit the project, it would
impact the viability and timeline of the project. Response to Production Request No. 3. Through
the SWIP agreements described earlier, if CAISO terminates participation in SWIP-North, GBT
must present the Company a plan within six months for completion of construction no later than
October 1, 2029, otherwise the Participation Agreement may be terminated. Id. Again, the
Company asserts it will not make any payments until construction is completed. Response to
Production Request No. 2.
STAFF COMMENTS 7 JULY 17, 2025

CPCN for SWIP-North
Staff evaluated the Company's Application with Idaho Code § 61-526 and Idaho Public
Utilities Commission Rule of Procedure 112, and Staff believes the Company has met the
statutory and regulatory requirements to obtain a CPCN.
According to Idaho Code § 61-526, the Company is required to show: (1) financial
ability; (2) good faith of the Applicant; and(3)public need. Staff believes the Company has met
all of these requirements. Additionally, the Company provided documents through its
Application and through discovery that Staff believes satisfies Commission Rule 112.2
Approval for SWIP-North CEA
Staff also recommends approval of the Company's utilization of an additional 250 MW
of transmission rights for the northbound capacity of SWIP-North. As discussed above, these
additional rights are included in the CEA and the cost of this additional capacity was included in
the Company's cost-benefit analysis. Since the net benefits were positive with this inclusion,
Staff believes that these additional rights should be approved.
PUBLIC INPUT
The Commission set a comment deadline for July 17, 2025. As of that date, eight
customer comments were filed, all in opposition to the Company's request. The common theme
was objection to forcing Idahoans to pay for infrastructure that will export power to California.
Staff notes that the Company is only paying for northbound capacity, which will enable
power to be imported into Idaho, but not exported out of Idaho. The Company(and therefore
ratepayers) will not be paying for southbound capacity that might be used to export power from
Idaho to California.
Even though the customers won't be paying for any southbound capacity, Staff surmises
the underlying objection may be to any Company participation in this project. To that point,
Staff offers two observations:
2 IDAPA 31.01.01-Rule 112.Existing utilities applying for the issuance or amendment of a certificate of
convenience and necessity under Section 61-526,Idaho Code,must submit: 1)Statement and Explanation,2)
Descriptions of Construction or Expansion,3)Map,4)Financial Statement and Construction Timelines,and 5)Cost
Estimates and Revenue Requirements.
STAFF COMMENTS 8 JULY 17, 2025

1. Even if the Company withdraws from the project, the project has backup funding
sources and the project is likely to be completed anyway. Ellsworth Direct at 25-26.
2. The financial benefits of participating in SWIP-North to Idaho ratepayers are
substantial, so Staff believes it is in the ratepayers' best financial interest to proceed.
STAFF RECOMMENDATION
Staff recommends the Commission:
1. Grant the Company a CPCN for ownership interest participation in SWIP-North 500-
kV transmission line, including the rights to 250 MW of the northbound capacity.
2. Approve the Company's utilization of an additional 250 MW of northbound capacity
via a Capacity Entitlement Agreement.
Respectfully submitted this 17th day of July 2025.
Chas Burdin
Deputy Attorney General
Technical Staff: Curtis Thaden, Kimberly Loskot, Matt Suess
1:\Utility\UMISC\COMMENCS\IPC-E-25-08 Comments(Redacted).docz
STAFF COMMENTS 9 JULY 17, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS EAAY OF JULY 2025, SERVED THE
FOREGOING COMMENTS OF THE COMMISSION STAFF (REDACTED) , IN CASE
NO. IPC-E-25-08, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
Idaho Power Company: Idaho Power Company:
DONOVAN E. WALKER TIM TATUM
IDAHO POWER COMPANY VP, REGULATORY AFFAIRS
PO BOX 70 IDAHO POWER COMPANY
BOISE ID 83707-0070 PO BOX 70
E-MAIL: dwalkeramidahopower.com BOISE ID 83707-0070
dockets rajdahopower.com E-MAIL: ttatum alidahopower.com
Idaho Irrigation Pumpers Ass'n (IIPA): Idaho Irrigation Pumpers Ass'n (IIPA):
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., SUITE 100 E-MAIL: lance Lcuae isinsi ht.com
POCATELLO, ID 83205
E-MAIL: elo�,eehob k.ccmi
Micron:
AUSTIN RUESCHHOFF
THORVALD A. NELSON
AUSTIN W. JENSEN
KRISTINE A.K. ROACH
HOLLAND & HART, LLP
555 17`h ST, STE. 3200
DENVER, CO 80202
E-MAIL:
darueschho ff(c-vhollandhart.com
tnelson @hollandhart.com
awiensen,c hollandhart.com
karoach«.hollandhart.com
aclee,whollandhart.com
PATRICIA JORDA , SECRETARY
CERTIFICATE OF SERVICE