20250806Direct Crane.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE )
APPLICATION OF ROCKY MOUNTAIN )
POWER FOR APPROVAL OF 2026 ) CASE NO. PAC-E-25-14
INTER-JURISDICTIONAL COST )
ALLOCATION PROTOCOL )
ROCKY MOUNTAIN POWER
Direct Testimony of Cindy A. Crane
August 2025

1 I . INTRODUCTION AND QUALIFICATIONS
2 Q. Please state your name, business address and present
3 position with the PacifiCorp d/b/a Rocky Mountain
4 Power ("Company") .
5 A. My name is Cindy A. Crane, and my business address is
6 825 NE Multnomah Street, Suite 2000, Portland, Oregon
7 97232 . I am currently employed as Chief Executive
8 Officer and Board Chair of the Company.
9 Q. Please describe your professional experience.
10 A. I joined the Company in 1990 . Since then I have served
11 as Director of Business Systems Integration, Managing
12 Director of Business Planning and Strategic Analysis,
13 Vice President of Strategy and Division Services, and
14 Vice President of Interwest Mining Company and Fuel
15 Resources . My responsibilities in these positions
16 included the management and development of the
17 Company' s 10-year business plan, managing the
18 construction of the Company' s Wyoming wind plants,
19 directing operations of the Energy West Mining and
20 Bridger Coal companies, and coal supply acquisition
21 and fuel management for the Company' s coal-fired
22 generating plants . From October 2014 until my
23 retirement in 2018, I served as President and Chief
24 Executive Officer ("CEO") of Rocky Mountain Power. In
25 that position, I was responsible for the Company' s
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1 business affairs in the states of Idaho, Utah, and
2 Wyoming. I was accountable for managing the Company' s
3 infrastructure investments and operations to deliver
4 safe and reliable electric service to our customers at
5 reasonable prices, which included a reasonable return
6 to investors . Following my retirement from the Company
7 in 2018, I remained active in the energy industry,
8 most recently serving as board chair and CEO of Enchant
9 Energy Corporation, an emerging environmental services
10 company focused on decarbonization for customers and
11 communities . In September 2023, I was appointed CEO
12 and Board Chair of the Company.
13 Q. Have you testified in other regulatory proceedings?
14 A. Yes . I have testified on various matters in the states
15 of Idaho, Utah, Wyoming, California, Oregon, and
16 Washington.
17 II . PURPOSE OF TESTIMONY
18 Q. What is the purpose of your testimony?
19 A. I provide an overview of the Company, followed by a
20 brief history of the Company' s previous cost-
21 allocation methodology development and introduce the
22 driving factors leading to the 2026 PacifiCorp Inter-
23 Jurisdictional Allocation Protocol ("2026 Protocol") .
24 Finally, I introduce Company witnesses providing
25 direct testimony in support of the Company' s
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1 Application for Approval of the 2026 Protocol
2 ("Application") .
3 III . DESCRIPTION OF THE COMPANY AND IDAHO
4 SERVICE AREA
5 Q. Please provide a description of the Company.
6 A. As an investor-owned, multi-jurisdictional electric
7 utility, the Company serves approximately two million
8 customers in six western states : Idaho, Utah, Wyoming,
9 California, Oregon, and Washington. The Company does
10 business as Rocky Mountain Power in Idaho, Utah, and
11 Wyoming and as Pacific Power in California, Oregon,
12 and Washington.
13 The Company serves its customers with a vast,
14 integrated system of generation and transmission that
15 spans ten states and connects customers and
16 communities across the West . The Company' s integrated
17 system provides benefits to customers in all six
18 states and includes generation, transmission, and
19 distribution assets . The Company owns, or has
20 interests in, thermal, hydroelectric, wind-powered,
21 solar, and geothermal generating facilities . The
22 Company buys and sells electricity on the wholesale
23 market with other utilities, energy marketing
24 companies, financial institutions, and other market
25 participants to balance and optimize the economic
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1 benefits of electricity generation, retail customer
2 loads, and existing wholesale transactions .
3 The Company provides wholesale transmission
4 service under its open access transmission tariff
5 approved by the Federal Energy Regulatory Commission
6 and owns or has interests in approximately 17, 700
7 miles of transmission lines . The Company operates two
8 balancing authority areas—PacifiCorp Balancing
9 Authority Area East and PacifiCorp Balancing Authority
10 Area West—that together comprise the largest privately
11 owned and operated grid in the Western United States .
12 Q. Please describe the Company' s Idaho service area.
13 A. In Idaho, the Company serves over 91, 000 customers .
14 The Company provides retail electric service in the
15 following 14 counties : Bannock, Bear Lake, Bingham,
16 Bonneville, Butte, Caribou, Clark, Franklin, Fremont,
17 Jefferson, Madison, Oneida, Power, and Teton. The
18 Company also has contracts with a number of
19 independent power producers in Idaho that operate
20 facilities representing over 330 megawatts of
21 installed capacity. '
' In the Matter of PacifiCorp's Application for Acknowledgement of the
2025 Integrate Resource Plan, Case No. PAC-E-25-12, PacifiCorp' s
Integrated Resource Plan for 2025 at Table 6.5 (originally filed on
March 31, 2025, in Case No. PAC-E-24-13) , available at https://www.paci
ficorp.com/content/dam/pcorp/documents/en/pacificorp/energy/integrated-
resource-plan/2025-irp/2025 IRP Vol l.pdf.
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1 The Company' s sales and revenues are
2 distributed among residential customers, small
3 businesses, and large businesses served under retail
4 tariffs subject to the jurisdiction of the Idaho
5 Public Utilities Commission ("Commission") .
6 Q. What is the Company' s core principle in providing
7 electric service to its customers?
8 A. The Company' s core principle is to provide energy
9 solutions in the form of safe, reliable, and
10 affordable energy to all its customers . The Company
11 has upheld this ideal for over 110 years and remains
12 steadfast in this commitment despite increasingly
13 challenging conditions associated with changing
14 economics, public policies, emerging and maturing
15 technologies, increased severity and frequency of
16 wildfires, and unprecedented large load growth.
17 Q. Why does the Company need a new allocation
18 methodology?
19 A. States are implementing energy policies that make it
20 increasingly difficult for the Company to operate and
21 maintain a single resource portfolio for customers
22 across all jurisdictions while meeting its legal
23 obligations in each state . The 2026 Protocol
24 implements a transition from a cost-allocation
25 methodology that contemplates the operation of a
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1 single resource portfolio to a cost-allocation
2 methodology that acknowledges the need for state or
3 regional resource portfolios to meet load obligations
4 on a least-cost basis, while complying with state
5 energy policies and preventing cross-subsidization
6 among jurisdictions . This transition will allow the
7 Company the opportunity to fully recover its costs,
8 supporting its financial health and reducing costs to
9 customers over the long term.
10 Q. You mention the need to fully recover costs to support
11 the financial health of the utility and protect
12 customers . What is an example of that risk?
13 A. On July 9, 2025, Moody' s Ratings ("Moody' s")
14 downgraded the Company' s ratings, including its senior
15 unsecured rating to Baa2 from Baal, its first mortgage
16 bond rating to A3 from A2, and its junior subordinated
17 notes to Baa3 from Baa2 . Moody' s based the downgrade,
18 in part, on the Utah Public Service Commission' s
19 July 3, 2025 decision denying the Company' s petition
20 to reconsider a credit negative rate case decision
21 earlier this year. 2 Moody' s cited to, among other
2 Moody' s Rating Action Press Release at 1-2 (July 9, 2025) (Exhibit No.
1 at 1-2) ; see In the Matters of the Application of Rocky Mountain Power
for Authority to Increase its Retail Electric Utility Service Rates in
Utah and for Approval of its Proposed Electric Service Schedules and
Electric Service Regulations, et al. , Docket Nos. 24-035-04, et al. , Order
Denying Request for Review (July 3, 2025) .
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1 things, the Utah Public Service Commission' s
2 disallowance of $106 million of wildfire mitigation
3 capital expenditures, $63 million in excess liability
4 insurance premiums, and $13 million related to
5 Washington' s Climate Commitment Act ("CCA")
6 allowances, finding those costs were related to
7 developments in other states . 3 Moody' s press release
8 summarizing its rating action is provided as Exhibit
9 1 to my testimony.
10 On July 28, 2025, S&P Global downgraded
11 PacifiCorp' s credit rating from BBB+ to BBB with a
12 negative outlook, and reduced PacifiCorp' s debt
13 ratings on first mortgage bonds, junior-subordinated
14 notes, and senior unsecured debt . 4 S&P Global also
15 pointed to the unfavorable outcome of the Company' s
16 Utah rate case—recovery of approximately one-quarter
17 of the amount requested—as well as legal developments
18 related to wildfires . S&P Global' s press release
19 summarizing its rating action is provided as Exhibit
20 2 to my testimony.
21 The 2026 Protocol initiates a multi-phase
22 process to transition the Company' s cost-allocation
23 methodology to accommodate diverging resource
3 Exhibit No. 1 at 1.
4 S&P Global's Rating Action Press Release at 1-2 (July 28, 2025)
(Exhibit No. 2 at 1-2) .
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1 portfolios and changes to operations needed to address
2 individual state energy policies—all of which helps
3 avoid similar outcomes and resulting downgrades, which
4 increase the cost of debt and, thus, customer rates .
5 IV. COMPANY COST ALLOCATION HISTORY
6 Q. Why is inter-jurisdictional cost allocation necessary
7 for the Company?
8 A. As mentioned above, the Company provides retail
9 electric service to approximately two million
10 customers in the western states of Idaho, Utah,
11 Wyoming, California, Oregon, and Washington. The
12 Company serves customers with generation,
13 transmission, and distribution facilities located
14 across the western United States .
15 For over a century, the Company has operated as
16 an integrated system, providing customers the benefits
17 of economies of scale and the reach of a large western
18 footprint . The Company recovers the costs of providing
19 retail electric service to customers through rates
20 established in regulatory proceedings in each state .
21 To ensure states receive the appropriate allocation of
22 costs and benefits from the Company' s integrated
23 system, and to provide an opportunity for the Company
24 to reasonably recover its cost of serving customers,
25 a cost allocation methodology is necessary.
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Rocky Mountain Power

1 Q. How has cost allocation been handled in the past?
2 A. The Company has used agreed-upon inter-jurisdictional
3 cost-allocation methods for over 35 years . These
4 methods have evolved and been refined over time, with
5 each cost-allocation method allocating to each state
6 a portion of the Company' s total system costs through
7 a combination of both dynamic system factors and
8 state-specific or situs factors .
9 The Company has used the collaborative Multi-
10 State Process ("MSP") to address allocation issues
11 since 2002 . Before 2002, there was the PacifiCorp
12 Inter-jurisdictional Taskforce on Allocation, which
13 established a series of agreements and subsequent
14 modifications . These collaborative processes have led
15 to the development and adoption of a series of inter-
16 jurisdictional cost-allocation methods over time . The
17 most recent approved agreement is the 2020 PacifiCorp
18 Inter-Jurisdictional Allocation Protocol ("2020
19 Protocol") , which I describe below.
20 Q. Has the Company recently faced new challenges related
21 to cost allocations?
22 A. Yes . For decades, the Company has relied on cost-
23 allocation methods that dynamically allocate total-
24 system costs to states . A bedrock of these cost-
25 allocation protocols has been the use of the Company' s
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1 system as a single whole . Except for distribution
2 assets, all states have been served from a common
3 portfolio of assets, including generation assets,
4 which has enabled the Company to cost effectively plan
5 for, and operate as, an integrated whole, resulting in
6 cost savings for all customers . However, divergent
7 state policies across the Company' s six-state service
8 territory are increasingly challenging this structure .
9 For example, Wyoming House Bill ("HB") 200 (2020) 5
10 requires that a portion of load in the state to be
11 served by carbon capture technology by July 1, 2033;
12 HB 166 (2021) 6 establishes a rebuttable presumption
13 against coal or gas fueled plant retirement; Oregon' s
14 HB 2021 (2021) 7 and Senate Bill ("SB") 1547 (2016) 8
15 set resource and emissions targets starting in 2030;
16 Utah SB 224 (2024) 9 establishes a preference for
17 dispatchable generation; Utah HB 411 (2019) 10 allows
18 for Utah communities to opt-in to programs to reach
19 100 percent renewable generation by 2030; Washington
20 SB 5116 (2019) , 11 the Clean Energy Transformation Act,
21 requires greenhouse gas neutrality by 2030 and carbon
5 WYO. STAT. ANN. §37-18-102 (a) (ii) .
6 WYO. STAT. ANN. §37-2-134.
' OR. REV. STAT. §469A.400 et. seq.
8 OR. REV. STAT. §757.518 et. seq.
9 UTAH CODE ANN. § 54-17-1001.
10 UTAH CODE ANN. § 54-17-901 et. seq.
11 WASH. REV. CODE §19.405.010 et. seq.
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1 free retail electricity by 2045; and Washington
2 HB 2528 (2020) 12 the CCA, requires the purchase of
3 allowances for emissions from various sources in the
4 state .
5 Q. When did these challenges begin to emerge regarding
6 the Company' s cost-allocation methodology?
7 A. As early as 2015, the parties to the MSP were
8 discussing these challenges . In fact, the predecessor
9 to the 2020 Protocol, the 2017 PacifiCorp Inter-
10 jurisdictional Allocation Protocol, was negotiated as
11 an interim and time-limited cost-allocation protocol,
12 designed to provide cost-allocation stability while
13 allowing time for parties to the MSP to continue to
14 explore alternative cost-allocation protocols to
15 better align with changing state policies . The 2020
16 Protocol similarly included an interim period, during
17 which the allocations agreed to in the 2020 Protocol
18 would apply and parties would continue to negotiate
19 means to address various issues arising from diverging
20 state policies .
21 Q. How are the challenges of diverging state policies
22 addressed in the 2026 Protocol?
23 A. States' energy policies continue to develop and are
24 being implemented in ways that make it increasingly
12 WASH. REV. CODE §70.45.005 et. seq.
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1 difficult for the Company to operate and dispatch a
2 single resource portfolio for all customers across all
3 jurisdictions while meeting its legal obligations in
4 each state . The 2026 Protocol lays the groundwork for
5 defining state-specific resource portfolios,
6 implemented through use of fixed allocation factors
7 for existing generation resources . The 2026 Protocol
8 also provides flexibility when allocating new
9 resources to these state-specific portfolios .
10 Q. What is the 2020 Protocol?
11 A. While more fully discussed in the direct testimony of
12 Company witness Joelle R. Steward, the 2020 Protocol
13 is an agreement between the Company and certain
14 parties, including regulatory agency staff, consumer
15 advocates, and other stakeholders in Idaho, Utah,
16 Wyoming, Oregon, and Washington, identifying the
17 specific allocation methodology for all the Company
18 costs in rate proceedings . The Idaho, 13 Utah, 14
13 In the Matter of Rocky Mountain Power's Application for Approval of
the 2020 PacifiCorp Inter-Jurisdictional Allocation Protocol, Case No.
PAC-E-19-20, Order No. 34640 (Apr. 22, 2020) .
14 In the Matter of the Application of Rocky Mountain Power for Approval
of the 2020 Inter-Jurisdictional Cost Allocation Agreement, Docket
No. 19-035-42, Order Approving 2020 Protocol (Apr. 14, 2020) .
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1 Wyoming, 15 Oregon, 16 and Washington17 commissions
2 approved the 2020 Protocol in 2020, and the California
3 Public Utilities Commission approved the 2020 Protocol
4 in the Company' s 2022 California general rate case . 18
5 In 2023, these commissions extended the 2020 Protocol
6 through 2025 . 19
7 The 2020 Protocol established the allocation
8 methodology currently being used and provided an
9 outline for a future methodology. That outline
10 included certain agreed upon components of the future
11 methodology called the "Resolved Issues" and
12 identified certain unresolved issues as "Framework
is In the Matter of the Application of Rocky Mountain Power for Approval
of the 2020 Inter-Jurisdictional Cost Allocation Agreement, Docket No.
20000-572-EA-19 (Record No. 15400) , Order No. 26740 (Dec. 3, 2020) .
16 In the Matter of PacifiCorp d/bla Pacific Power, Request to Initiate
an Investigation of Multi-Jurisdictional Issues and Approve an Inter-
Jurisdictional Cost Allocation Protocol, Docket No. UM 1050, Order No.
20-024 (Jan. 23, 2020) .
17 In the Matter of Washington Utilities and Transportation Commission
v. PacifiCorp d/bla Pacific Power and Light Co. , Docket Nos. UE-191024,
et al. , Final Order 09 / 07 / 12 (Dec. 14, 2020) .
18 In the Matter of the Application of the Company (U901E) , for an Order
Authorizing a General Rate Increase Effective January 1, 2023, Application
22-05-006, Decision 23-12-016 (Dec. 14, 2023) .
19 2020 Protocol extension orders— Idaho, In the Matter of Rocky Mountain
Power's Petition for Approval of an Extension of the 2020 Inter-
Jurisdictional Allocation Protocol, Case No. PAC-E-23-13, Order No. 35984
(Nov. 2, 2023) ; Utah, Application of Rocky Mountain Power for Approval of
an Extension to the 2020 Inter-Jurisdictional Cost Allocation Agreement,
Docket No. 23-035-20, Order Approving Extension of the 2020 Protocol (July
27, 2023) ; Wyoming, In the Matter of the Application of Rocky Mountain
Power for Authority to Extend the 2020 Inter-Jurisdictional Cost
Allocation Agreement Through December 31, 2025, Docket No. 20000-641-EA-
23 (Record No. 17280) , Order (Feb. 6, 2024) ; and Oregon, In the Matter of
PacifiCorp, dba Pacific Power, Request to Initiate an Investigation of
the Multi-Jurisdictional Issues and Approve an Inter-Jurisdictional Cost
Allocation Protocol, Docket No. UM 1050, Order No. 23-229 (June 30, 2023.
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1 Issues" for negotiation in the "Interim Period" before
2 agreement on a new cost-allocation methodology.
3 Prior to the extension, the parties (including
4 Washington parties that were signatories to the 2020
5 Protocol) engaged in negotiations on the Framework
6 Issues through the Framework Issues Workgroup. In
7 those negotiations, the parties considered alternative
8 resource allocation methods, which they agreed
9 warranted further review. The extension allowed the
10 parties to continue discussions seeking to resolve the
11 Framework Issues and agree on a cost-allocation
12 methodology to propose for the post-Interim Period.
13 Q. Was the Framework Issues Workgroup able to reach
14 consensus on the Framework Issues?
15 A. No . While discussions with the Framework Issues
16 Workgroup over the last several years were positive-
17 reaching consensus on some issues, making progress on
18 others, and identifying alternative options to
19 explore—the Workgroup was not able to reach consensus
20 on a further extension of the 2020 Protocol or the
21 terms of a replacement cost-allocation methodology by
22 the end of the extended Interim Period.
23 Q. In developing the 2020 Protocol, did the Company
24 identify principles to help evaluate development of a
25 transitional approach to cost allocations?
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1 A. Yes . The Company' s guiding principles established that
2 a new cost-allocation protocol should:
3 • Provide a long-term, durable solution;
4 • Follow cost-causation principles;
5 • Minimize rate impacts at implementation;
6 • Allow for state autonomy for new resource portfolio
7 selection;
8 • Maintain and optimize system-wide benefits and joint
9 dispatch to the extent possible;
10 • Enable compliance with state policies;
11 • Ensure credit-supportive financial outcomes; and
12 • Provide the Company with a reasonable opportunity
13 to recover its costs .
14 Q. Did the Company consider these principles in
15 developing the 2026 Protocol?
16 A. Yes, these guiding principles remain helpful and
17 relevant . In Idaho, however, the importance of
18 maintaining and optimizing system-wide benefits must
19 be balanced with complying with various state policies
20 and allowing for state autonomy for new resource
21 portfolio selection.
22 V. PATH FORWARD
23 Q. What is proposed in the 2026 Protocol?
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1 A. The 2026 Protocol is the first phase in a multi-phase
2 process to transition the Company' s cost-allocation
3 methodology to accommodate diverging resource
4 portfolios and changes to operations needed to address
5 individual state energy policies (Phase 1) . The 2026
6 Protocol will work in conjunction with the Washington
7 2026 Protocol .
8 Q. What is the Washington 2026 Protocol?
9 A. The Company proposed the Washington 2026 Protocol on
10 April 1, 2025, in the Company' s Washington Power Cost
11 Only Rate Case ("PCORC") docket . 20 The Washington 2026
12 Protocol is a separate allocation methodology intended
13 to address specific, near-term energy policy in
14 Washington by creating a defined resource portfolio
15 that can be managed to meet compliance requirements .
16 It establishes fixed allocation shares of certain
17 Company generation resources to serve Washington load.
18 Accordingly, Washington will not receive a dynamic
19 allocation of generation costs based on its load
20 relative to system load on a year-to-year basis but
21 instead will pay the full cost of its share of assigned
22 resources . Washington customers will, however,
20 Washington Utilities and Transportation Commission v. PacifiCorp dba
Pacific Power and Light Co. , Docket No. UE-250224, Initial Filing
(April 1, 2025)
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1 continue to pay their relative share of transmission
2 and other Company costs .
3 Q. Is the 2026 Protocol the final cost-allocation
4 methodology for Idaho, Utah, Wyoming, California, and
5 Oregon, referred to collectively as the "Five States"?
6 A. No . The 2026 Protocol marks an initial step to
7 transition the allocation of costs to align with
8 changes in operations and to establish rate base in a
9 manner that aligns costs and benefits consistent with
10 state energy policies in those states . As discussed
11 more fully in Company witness Steward' s testimony, the
12 2026 Protocol provides a path to transition to more
13 state-specific future resources to comply with
14 upcoming state energy policy and legal obligations . It
15 also provides a path for a second phase transition to
16 further support the Company' s ability to meet upcoming
17 legal obligations and enable different resource
18 portfolios to comply with individual state or regional
19 energy policies (Phase 2) .
20 Q. Why is the Company proposing that there be a Phase 2?
21 A. The scope of this filing was to address the expiration
22 of the 2020 Protocol and Washington' s exit from coal .
23 The Company anticipates that the scope in Phase 2 will
24 be significantly broader, which will include
25 addressing complex operational and planning issues
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1 necessary to unwind a system that has been built over
2 the course of a century. This is a much more expansive
3 and complicated scope that cannot be addressed in a
4 few months . The Company needs additional time to
5 develop a comprehensive proposal . Approving this 2026
6 Protocol and these Phase 1 changes are necessary to
7 replace the 2020 Protocol, and provide a principled
8 allocation methodology until Phase 2 .
9 Q. When will the Company make the Phase 2 filing?
10 A. The Company intends to make that filing so that rates
11 effective on January 1, 2030, will comply with
12 applicable resource requirements, including Oregon SB
13 1547' s restriction on coal-fueled thermal resources .
14 Q. Will the delay in implementation until Phase 2 harm
15 Idaho customers?
16 A. No, to the contrary, it protects Idaho customers from
17 unintended consequences . Cost allocation issues are
18 heavily interrelated and extremely complex. Thus,
19 despite continued discussions with the Framework
20 Issues Workgroup, a consensus could not be reached in
21 that context . The state energy policies listed above
22 are still being implemented, and the effects are not
23 yet known. Additionally, this industry is rapidly
24 changing, unlike anything we have experienced before,
25 with new large load growth potentially doubling
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1 current resource needs in some states . It will take
2 time to determine how to address the associated costs
3 to maintain reliability and affordability. There are
4 also anticipated near-term benefits to customers from
5 remaining part of an integrated system, as the Company
6 enters into an expanded organized wholesale market, as
7 discussed further by Company witness Micheal G.
8 Wilding. 21 Accordingly, it is premature to propose a
9 cost allocation methodology now to address the
10 necessary resource portfolio changes in 2030 and
11 beyond at this time .
12 VI . INTRODUCTION OF COMPANY WITNESSES
13 Q. How is the Company supporting its Application?
14 A. The Company is presenting the following direct
15 testimony in support of its Application:
16 • Joelle R. Steward, Senior Vice President, Resource
17 Planning and Procurement, describes and supports the
18 Company' s new inter-jurisdictional cost-allocation
19 methodology for Idaho, the 2026 Protocol .
20 • Ramon J. Mitchell, Director of Net Power Costs
21 ("NPC") , presents the impact of the 2026 Protocol
22 on the Company' s NPC forecast.
23 • Shelley E. McCoy, Director of Revenue Requirement,
24 calculates impacts to the Company' s revenue
25 requirement from the 2026 Protocol .
26 • Michael G. Wilding, Vice President, Energy Supply
27 Management, explains how the 2026 Protocol supports
28 resource adequacy for Idaho and the rest of the Five
29 States, describes the Company' s proposed changes to
21 See Direct Testimony of Michael G. Wilding (Aug. 6, 2025) .
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I its hedging program and Western Resource Adequacy
2 Program compliance, and explains the Company' s
3 participation in organized markets .
4 VII . RECOMMENDATION
5 Q. What action do you recommend the Commission take with
6 respect to the Company' s Application?
7 A. I recommend that the Commission approve the 2026
8 Protocol for the reasons provided here and in the
9 Company' s supporting testimony.
10 Q. Does this conclude your direct testimony?
11 A. Yes .
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Rocky Mountain Power
Exhibit No . 1
Case No . PAC-E-25-14
Witness : Cindy A. Crane
BEFORE THE IDAHO PUBLIC UTILITIES
COMMISSION
ROCKY MOUNTAIN POWER
Exhibit Accompanying Direct Testimony of Cindy A. Crane
Moody' s Rating Action Press Release (July 9, 2025)
August 2025

Rocky Mountain Power
Exhibit No. 1 1 Page 1 of 7
Case No. PAC-E-25-14
Witness:Cindy A.Crane
MOODY'S
RATINGS
Rating Action: Moody's Ratings downgrades PacifiCorp to
Baal; outlook stable
09 Jul 2025
Approximately $14.4 billion of debt securities affected
New York,July 09, 2025 -- Moody's Ratings (Moody's) today downgraded PacifiCorp's ratings,
including its senior unsecured rating to Baa2 from Baal, its first mortgage bond rating to A3
from A2, and its junior subordinated notes to Baa3 from Baa2. The company's short-term rating
for commercial paper rating was affirmed at P-2. The outlook is stable.
A full list of affected ratings appears towards the end of this press release.
RATINGS RATIONALE
"The downgrade of PacifiCorp follows the Utah Public Service Commission's (UPSC) findings and
conclusion on its July 3, 2025 decision to deny the company's petition to reconsider a credit
negative rate case decision earlier this year," said Toby Shea, Vice President- Senior Credit
Officer. "PacifiCorp's credit profile has been under pressure, driven by rising costs and debt
associated with wildfire litigation and mitigation efforts, that the rate case outcome will not
sufficiently alleviate, a key reason for the downgrade."
The UPSC issued a rate order in late April that approved an $87.2 million increase to PacifiCorp's
Utah base rate, representing only 26.4% of the company's request for a $330.2 million increase.
The UPSC also premised its revenue requirement calculation on an authorized return on equity
(ROE) of 9.375% and an equity ratio of 44.43%—both well below industry averages.
In particular, the UPSC disallowed, among other things, $106 million of wildfire mitigation
capital expenditures, $63 million in excess liability insurance premiums after reconsideration,
and $13 million related to the state of Washington's carbon emission allowance requirements.
The UPSC may have viewed that some of these costs are related to developments in other states
within PacifiCorp's service territory, such as the 2020 Labor Day wildfires in Oregon and policy-
driven costs stemming from the state of Washington. The Commission concluded that Utah
ratepayers should not bear the financial burden of cost escalations originating in other states.
In addition, PacifiCorp continues to face mounting wildfire-related litigation expenses and
liabilities. As of the first quarter of 2025, the company has accrued $2.75 billion in estimated
probable losses and has paid $1.33 billion in settlements. To bolster its balance sheet and
liquidity, PacifiCorp has suspended annual dividends and reduced capital expenditures, enabling
it to retain more cash to help absorb the financial impact of wildfire liabilities. Nevertheless, the
strain on its credit metrics remains significant. For example, the company's CFO pre-WC to debt
ratio averaged only around 10% in 2023 and 2024, while its debt-to-capitalization ratio rose to
56.7% at the end of Q1 2025, up from 47.4% at year-end 2022.
As a result of these cost pressures and the adverse rate case outcome, we expect the company's
CFO pre-WC to debt ratio to stabilize in the 14%-16% range—a level we consider more
consistent with a Baa2 senior unsecured rating.
Outlook

Rocky Mountain Power
Exhibit No. 1 1 Page 2 of 7
Case No. PAC-E-25-14
Witness:Cindy A.Crane
PacifiCorp's stable outlook reflects the strength and resilience of its large and diversified
operations across the Northwestern U.S. While the company faces headwinds from significant
wildfire-related litigation and challenges recovering rising insurance premiums and other costs
in Utah, we expect credit supportive regulation to continue in the other five states in which it
operates. As a result, PacifiCorp is projected to maintain a CFO pre-WC to debt ratio in the 14%
to 16% range—a level consistent with its current rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade
We could take a positive rating action if the regulatory environment in Utah improves and the
company's CFO pre-working capital to debt ratio rises to 16% or higher on a sustained basis.
A positive action could also be considered should there be additional clarity with regard to
PacifiCorp's ultimate financial exposure to wildfire liabilities as settlements occur and pending
litigation is resolved, which could take several years.
Factors that could lead to a downgrade
We could take a negative action on PacifiCorp's ratings if the company experiences additional
cost disallowances or a deteriorating regulatory environment in its other material regulatory
jurisdictions such as Oregon or Wyoming.
A negative rating action could also result if wildfire-related liabilities rise unexpectedly and
threaten to deplete the company's cash reserves or result in significant additional debt.
Additionally, a downgrade could be considered if PacifiCorp's CFO pre-working capital to debt
ratio falls below 13% on a sustained basis.
Company Profile
PacifiCorp is one of the largest and most diversified operating utilities in the U.S. headquartered
in Portland, Oregon. According to Energy Information Administration (EIA) data, it sold
approximately 58 TWh of electricity to retail customers in 2024, ranking sixth among investor-
owned utilities based on bundled sales. The company serves retail customers across six states—
more than any other investor-owned utility in the U.S. It is an operating subsidiary of Berkshire
Hathaway Energy.
LIST OF AFFECTED RATINGS
Issuer: PacifiCorp
..Downgrades:
.... LT Issuer Rating, Downgraded to Baa2 from Baal
....Junior Subordinated , Downgraded to Baa3 from Baa2
.... Preferred Stock, Downgraded to Bat from Baa3
.... Senior Secured First Mortgage Bonds, Downgraded to A3 from A2
.... Backed Senior Secured First Mortgage Bonds, Downgraded to A3 from A2
.... Underlying Senior Secured First Mortgage Bonds, Downgraded to A3 from A2
.... Senior Secured Shelf, Downgraded from (P)A3 to (P)A2
.... Senior Unsecured Bank Credit Facility, Downgraded to Baa2 from Baal
..Affirmations:

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Witness:Cindy A.Crane
.... Commercial Paper, Affirmed P-2
..Outlook Actions:
....Outlook, Remains Stable
Issuer: Converse (County of) WY
..Downgrades:
.... Backed Senior Secured Revenue Bonds, Downgraded to A3 from A2
..Affirmations:
.... Backed Other Short Term Senior Secured Revenue Bonds, Affirmed P-2
Issuer: Lincoln (County of) WY
..Downgrades
.... Senior Secured Revenue Bonds, Downgraded to A3 from A2
..Affirmations:
.... Other Short Term Senior Secured Revenue Bonds, Affirmed P-2
Issuer: Sweetwater (County of) WY
..Downgrades:
.... Senior Unsecured Revenue Bonds, Downgraded to Baa2 from Baal
..Affirmations:
.... Other Short Term Senior Unsecured Revenue Bonds, Affirmed P-2
The principal methodology used in these ratings was Regulated Electric and Gas Utilities
published in August 2024 and available at https://ratings.moodys.com/rmc-documents/426183.
Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy
of this methodology.
The net effect of any adjustments applied to rating factor scores or scorecard outputs under the
primary methodology(ies), if any, was not material to the ratings addressed in this
announcement.
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exclusively from existing ratings, in accordance with Moody's rating practices, can be found in

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the most recent Credit Rating Announcement related to the same class of Credit Rating.
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Witness:Cindy A.Crane
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Witness:Cindy A.Crane
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Witness:Cindy A.Crane
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Rocky Mountain Power
Exhibit No . 2
Case No . PAC-E-25-14
Witness : Cindy A. Crane
BEFORE THE IDAHO PUBLIC UTILITIES
COMMISSION
ROCKY MOUNTAIN POWER
Exhibit Accompanying Direct Testimony of Cindy A. Crane
S&P Global' s Rating Action Press Release (July 28, 2025)
August 2025

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Exhibit No.2 1 Page 1 of 3
Case No. PAC-E-25-14
Witness:Cindy A.Crane
PacifiCorp Downgraded To 'BBB' From 'BBB+'
On Weaker Expected Financial Measures,
Outlook Negative; Debt Ratings Lowered
• The Public Service Commission of Utah(PSC)recently authorized a rate increase for
PacifiCorp's latest general rate case that was lower than what we previously expected.
• Prior to this rate order,the company's financial measures were already weak for the rating,
including funds from operations(FFO)to debt of 11.3%for the 12-months ended March
2025. Given recent regulatory developments and the continued elevated costs stemming
from its wildfire litigation,we do not expect PacifiCorp will improve its FFO to debt
consistently above 13%.
• Therefore, S&P Global Ratings lowered its long-term issuer credit rating(ICR)on
PacifiCorp to 'BBB' from'BBB+'.At the same time,we lowered our issue-level rating on
the company's first-mortgage bonds(FMB)to'A-'from'A', our issue-level rating on its
junior-subordinated notes (JSN)to'BB+' from'BBB-', and our issue-level rating on its
senior unsecured debt to'BBB'from'BBB+'.We also affirmed our'A-2' short-term rating.
• The negative outlook reflects the likelihood that we could lower our ratings on PacifiCorp
by one or more notches over the next 24 months depending on the legal developments
related to the wildfires in its service territory or other regulatory or legislative developments
concerning its credit quality.We expect the company's FFO to debt will be in the 10%-13%
range over our outlook period.
NEW YORK(S&P Global Ratings)July 28,2025--S&P Global Ratings today took the rating actions
listed above.
The downgrade reflects our expectation that PacifiCorp's financial measures will be weaker than we
previously forecast following its rate-case outcome in Utah. The PSC authorized the company to
increase its rates by approximately$94 million,which is about a quarter of the approximately$394
million rate increase it requested under its amended rate application from August 2024.We had
previously expected a more-favorable outcome. Prior to the order,we viewed PacifiCorp's forecast
FFO to debt as weak for the'BBB+'rating,given the increased operating expenses related to its
ongoing wildfire litigation in Oregon,increased insurance premiums, as well as other inflationary cost
pressures. In addition,the company's reported credit measures had been weak,including FFO to debt
of 11.3%for the 12-months ended March 2025.We now expect PacifiCorp's FFO to debt will remain
between 10%and 13%over our outlook period, assuming no dividends to its parent, capital spending
averaging about$2.8 billion over the next five years,protracted litigation regarding the James case,
and continued use of existing regulatory mechanisms.To account for our expectation of a continued
weakening in the company's financial performance,we revised our stand-alone credit profile to'bb'
from'bb+'.
We continue to assess PacifiCorp as strategically important to Berkshire Hathaway Energy Co. (BHE).
This reflects our expectation that the company would receive extraordinary support from BHE under
most foreseeable circumstances,though we have doubts around the extent of such support,which
precludes us from assessing a higher support category. Furthermore,this reflects our view that
PacifiCorp is unlikely to be sold, is important to BHE's long-term strategy,benefits from a long-term
commitment from BHE,and has realistic medium-term prospects for success relative to BHE's
expectations. Our assessment of PacifiCorp as strategically important to BHE provides three notches of
uplift to the rating.We will continue to monitor BHE's explicit and implicit support for PacifiCorp. If

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Exhibit No.2 1 Page 2 of 3
Case No. PAC-E-25-14
Witness:Cindy A.Crane
we downwardly revise our assessment of PacifiCorp's group support from BHE,we would likely lower
our long-term ICR on the company by more than one notch.
The negative outlook reflects the likelihood that we could lower our ratings on PacifiCorp by one or
more notches over the next 24 months depending on the legal developments related to the wildfires in
its service territory or other regulatory or legislative developments concerning its credit quality.We
expect the company's FFO to debt will be in the 10%-13%range over our outlook period.
We could lower our ratings on PacifiCorp by one or more notches in the next 24 months if:
• The company continues to face legal challenges without receiving commensurate long-term
support from its parent;
• Its business risk increases due to adverse legal,regulatory,or legislative developments;
• The estimated damages under the company's wildfire lawsuits,including the James case,
expand significantly;
• The company's stand-alone FFO to debt falls consistently below 11%; or
• The company's actions contribute to another significant wildfire.
We could affirm our ratings on PacifiCorp and revise our outlook to stable in the next 24 months if:
• It achieves further favorable legal outcomes such that its wildfire liabilities remain limited;
• The company is not the cause of a materially significant wildfire; and
• It maintains FFO to debt of more than 11%.
Related Criteria
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https:Hdisclosure.spglobal.com/ratings/en/regulatory/ratings-criteria for further information.A
description of each of S&P Global Ratings'rating categories is contained in"S&P Global Ratings
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Case No. PAC-E-25-14
Witness:Cindy A.Crane
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