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Home My WebLink About20251002Staff Comments.pdf RECEIVED October 02, 2025 ERIKA K. MELANSON IDAHO PUBLIC DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION IDAHO PUBLIC UTILITIES COMMISSION PO BOX 83720 BOISE, IDAHO 83720-0074 (208) 334-0320 IDAHO BAR NO. 11560 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 ) CASE NO. IPC-E-25-25 APPROVAL OF THE CAPACITY ) DEFICIENCY TO BE UTILIZED FOR ) AVOIDED COST CALCULATIONS ) COMMENTS OF THE COMMISSION STAFF COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission ("Commission"), by and through its attorney of record, Erika K. Melanson, Deputy Attorney General, submits the following comments. BACKGROUND On July 25, 2025, Idaho Power Company("Company") applied to the Commission requesting an order approving the capacity deficiency period with a first deficit occurring in June 2027 to be utilized for the Company's Public Utility Regulatory Policy Act ("PURPA") avoided cost determinations under the Company's Incremental Cost Integrated Resource Plan("ICIRP") and Surrogate Avoided Resource ("SAR")methods. The Commission has established a SAR methodology and an ICIRP methodology to calculate avoided cost rates for qualifying facilities ("QFs"). Order No. 32697. Under both STAFF COMMENTS 1 OCTOBER 2, 2025 methods, a new QF receives capacity payments only after the applicable capacity deficit date is reached. Order No. 33159. The capacity deficiency period is determined through the Integrated Resource Plan ("IRP")planning process and is submitted to the Commission in a proceeding separate from the IRP docket. Order No. 32697. The capacity deficit date determined in the IRP process is presumed to be correct as a starting point but will be subject to the outcome of the capacity deficiency case. Id. Companies are required to file for an order from the Commission approving the capacity deficiency period within thirty (30) days after each utility files its respective IRP. Order No. 35810. STAFF ANALYSIS The first capacity deficiency date is determined when load with a planning reserve margin exceeds the capacity of the Company's resources. The date establishes the time when new QFs start receiving capacity payments. Staff has reviewed the load and resource inputs the Company used to determine its capacity deficiency period in this case. The Company states that it is not clear whether executed contracts not yet approved should be included in the analysis. Application at 7. To clarify the confusion, Staff believes that further explanations are needed regarding approvals of contracts and resources when determining the capacity deficiency period. Specifically, Staff recommends that the Company file updated capacity positions through a compliance filing that includes the resources, as of the compliance filing, specified below: • Include all executed contracts for non-PURPA contracts that do not require pre- approval; • If a resource requires a Certificate of Public Convenience and Necessity ("CPCN"), only include it if it has received a CPCN; and • Only include approved PURPA projects. Furthermore, Staff recommends that the Company use exit dates that reflect the original technical useful lives of Jim Bridger units 3 and 4 instead of the dates proposed by the Company. Load Forecast The Company uses the 701h-percentile peak load forecast to determine its capacity deficiency period, which is the same percentile selected for reliability studies in the 2025 IRP. STAFF COMMENTS 2 OCTOBER 2, 2025 Since the 701h-percentil peak load forecast results in the average Loss of Load Expectation that is closest to the 0.1 event-days per year(Appendix D of 2025 IRP at 5), Staff believes it is reasonable to use the 70th-percentile peak load forecast in this filing. Resources Staff believes the resources included in the Company's analysis are reasonable, except the future resources that should be included and the exit dates that should be used for the Jim Bridger units 3 and 4. Contracts and Capacity Project Approvals The Company includes resources that have not been approved in its analysis to determine the capacity deficiency period, such as the Crimson Orchard Solar Power Purchase Agreement and its Battery Energy Storage System Energy Storage Agreement (Case No. IPC-E-25-10), and the Boise Bench Expansion and Hemingway Expansion battery storage facilities requiring a CPCN (Case No. IPC-E-24-45). Staff recommends that the Company(1) include all non- PURPA executed contracts that do not require pre-approval as of the compliance filing, (2) only include approved CPCN projects as of the compliance filing, and (3) only include approved PURPA contracts as of the compliance filing.1 Order No. 35834 states that approved contracts where pre-approval is necessary, or executed contracts where pre-approval is unnecessary, should be included in determining the capacity deficiency period. Although the Company typically files non-PURPA Power Purchase Agreements and non-PURPA Energy Storage Agreements for pre-approval to gain higher certainty of cost recovery, pre-approval for these types of contracts is not required by the Commission(e.g., Avista Utilities and Rocky Mountain Power typically do not apply for pre- approval of these types of contracts before these projects come online). Therefore, Staff recommends that the Company include all executed non-PURPA contracts that do not require pre-approval to determine the deficit date in a compliance filing. However, since Commission authorization is required for PURPA projects and for resources that require a CPCN, Staff ' "Executed"means all the parties involved have signed the contract. "Approved"means the contract has been approved by the Commission. STAFF COMMENTS 3 OCTOBER 2, 2025 recommends that these resources only be included in the determination of the deficit date if they are approved. Jim Bridger 3 and 4 The Company assumes that Jim Bridger 3 and 4 will exit in 2030 in this case, the dates of which are aligned with the accelerated depreciation schedules authorized by the Commission. Order No. 35423 at 13. However, Staff believes that due to the remaining amount of uncertainty that still exists regarding the timeframe for continued use of these two units, Staff recommends that the operational exit dates used for determining the deficit date should reflect the original technical useful lives of Jim Bridger units 3 and 4 until such time that the Company can determine with a reasonable amount of certainty when these two units will cease providing capacity to the Company's system. In Case No. IPC-E-21-17, the Commission authorized accelerated depreciation schedules that fully depreciate coal assets of Jim Bridger by December 31, 2030. Id. However, the dates used to set depreciation schedules do not necessarily align with operational exit dates and can be based on other factors. As the Commission said in its order related to its decision to accelerate the depreciation schedule, "It is always our responsibility to balance the ratepayer's access to affordable energy prices with the Company's right to recover its costs and earn a reasonable return on its investments."Id. The Commission also noted"the uncertainty that remains with respect to the Company's exit date from Bridger and the absence of any current plan to develop a firm exit date."Id. Staff believes the uncertainty that existed in 2021 still remains. The Company stated that the timeframe for continued operation of these units is still uncertain due to "national policy and regulation, PacifiCorp and Idaho Power's developing needs, evolving costs, studies, regulatory dockets, etc." Response to Staff Production Request No. 4. STAFF RECOMMENDATION Staff recommends that the Company file updated capacity positions through a compliance filing that includes the resources, as of the compliance filing, to reflect the following: • For non-PURPA contracts that do not require pre-approval, include all executed contracts; • For resources that require a CPCN, only include projects that have received a CPCN; STAFF COMMENTS 4 OCTOBER 2, 2025 • For PURPA projects, only include Commission-approved PURPA projects; and • Use exit dates that reflect the original technical useful lives of Jim Bridger units 3 and 4. Respectfully submitted this 2nd day of October 2025. LnA,,&J RAA_ Erika K. Melanson Deputy Attorney General Technical Staff: Yao Yin I:\Utility\UMISC\COMMENTS\IPC-E-25-25 Comments.docx STAFF COMMENTS 5 OCTOBER 2, 2025 CERTIFICATE OF SERVICE ,J I HEREBY CERTIFY THAT I HAVE THIS DAY OF OCTOBER 2025, SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE NO. IPC-E-25-25, BY E-MAILING A COPY THEREOF TO THE FOLLOWING: Idaho Power Company: DONOVAN E. WALKER MEGAN GOICOECHEA ALLEN CAMILLE CHRISTEN IPC DOCKETS IDAHO POWER COMPANY 1221 WEST IDAHO STREET (83702) PO BOX 70 BOISE ID 83707-0070 E-MAIL: dwalkercidahopower.eom m goico echeaallencidahopower.com cchristencidahopower.com energycontractscidahopower.com dockets c;idahopower.com IdaHydro: C. TOM ARKOOSH NICHOLAS J. EREKSON ARKOOSH LAW OFFICES 913 W. RIVER STREET, SUITE 450 P.O. BOX 2900 E-MAIL: tom.arkoosh c arkoosh.com nick.erekson(cL arkoosh.com erin.cecilcarkoosh.com PATRICIA JORD , SECRETARY CERTIFICATE OF SERVICE