20251003Staff Comments.pdf

RECEIVED
October 03, 2025
ERIKA K. MELANSON IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
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-25-10
APPROVAL OF A POWER PURCHASE )
AGREEMENT AND ENERGY STORAGE )
AGREEMENT WITH CRIMSON ORCHARD ) REDACTED SUPPLEMENTAL
SOLAR, LLC ) 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 March 13, 2025, Idaho Power Company("Company") filed an Application with the
Commission for an order: (1) approving the 20-year Power Purchase Agreement("PPA")
between Crimson Orchard Solar LLC ("Crimson Orchard") and the Company, supplying 100
megawatts ("MW") output to the Company; (2) approving the 20-year Energy Storage
Agreement ("ESA")between Crimson Orchard and the Company for 100 MW of dispatchable
energy storage capacity; and (3) acknowledging the lease accounting necessary to facilitate the
SUPPLEMENTAL STAFF COMMENTS 1 OCTOBER 3, 2025

transaction and the resulting expenses associated with both the PPA and the ESA are prudently
incurred for ratemaking purposes.
On April 25, 2025, the Commission issued a Notice of Application and Notice of
Modified Procedure, establishing an August 1, 2025, deadline for public and Staff comments,
and an August 22, 2025, deadline for the Company to file reply comments. Order No. 36577.
The Commission granted intervention to Idaho Irrigation Pumpers Association, Inc. ("IIPA") and
Micron Technologies, Inc. Order Nos. 36538 and 36598. On August 1, 2025, comments were
filled by Staff and IIPA.
On August 15, 2025, the Company filed a Supplemental Application with the
Commission, providing an Amendment to the PPA and ESA proposed in the Application. On
August 22, 2025, the Commission issued an Order vacating the August 1, 2025, public comment
deadline, and the August 22, 2025, reply comment deadline. Order No. 36736. On September 8,
2025, the Commission issued a Notice of Modified Schedule, establishing an October 3, 2025,
deadline for public and Staff comments, and an October 17, 2025, deadline for the Company to
file reply comments. Order No. 36755.
STAFF ANALYSIS
1. Initial Summary
Staff agrees that the Company's system continues to face a capacity deficit in 2027, and
the Crimson Orchard resource is a least-cost, least-risk("LC-LW') solution. However, the
Supplemental Application proposes be deemed prudent by the Commission.
Staff believes the Company should bear this and therefore recommends
approving the amended agreements with based on the
originally submitted agreements. Also,because the purchase options have been replicated in the
amended agreements, Staff reaffirms its recommendation from the first set of comments to
exclude the purchase options from a determination of prudence.
2. Amended Agreement Terms
Why Changes Were Made
In its Supplemental Application, the Company explained how the Crimson Orchard
developer("developer")
SUPPLEMENTAL STAFF COMMENTS 2 OCTOBER 3, 2025

Supplemental Application at 6. The Company then
explained
The Company believes that under the current circumstances given the immediate
deficits on Idaho Power's system combined with the very constrained generation
construction and procurement environment as well as the lack of other viable
options, that the Crimson Orchard Project including the proposed First
Amendments to the PPA and ESA continues to be the least-cost, least-risk and
prudent resource in order for the Company to meet its obligations to serve its
customers in 2027 and beyond.
Id.
Amendments to the Agreements
The Company explained that it signed a First Amendment to the PPA("PPA1") and a
First Amendment to the ESA("ESA1"), with both amended agreements reflecting similar
changes to their original agreements. The changes in each amended agreement were:
(a)
(b)Additional definitions related to the new agreement terms;
(c)A revision to the force majeure definition;
(d)Additional language regarding equal employment opportunity law; and
(e)Additional language recommended by Commission Staff concerning the Bilateral
Modification provision.
Id. at 7.
Staff Comments on the Changes
Staff discusses changes related to item(a) above in subsequent sections of this analysis.
Staff also believes that changes related to items (b), (c), and(d) are acceptable as proposed.
Staff appreciates the Company's changes related to item(e), which incorporates Staff s
recommendation regarding bilateral modifications. Staff therefore refrains from resubmitting
that recommendation in these supplemental comments.
Finally, Staff s original recommendation about prematurely determining prudence for the
purchase options has not been addressed. Therefore, Staff reiterates its earlier recommendation
that the Commission exclude the purchase options from any determination of prudence, and that
SUPPLEMENTAL STAFF COMMENTS 3 OCTOBER 3, 2025

it require the Company to seek a determination of prudence if it exercises the purchase options
and requests recovery.
The Company's fundamental reason for the amendments is due to the
-under the Trump Administration. Supplemental Application at 5. A change in the-
—It is
Therefore, the developer sought with the Company.
For the reason stated in section two above, the Company opted to
■. The Company explained the negotiated on pages 7 and 8 of its
Supplemental Application. In short, the new agreements require the Company
with the developer,up to a If the—
,the negotiated
accordingly.
In its confidential response to Staffs Production Request No. 27,the Company provided
the for their 20-year terms while
assuming and The Company's results for both
are sununarized in Table No. 1 below.
Table No. 1 —
NPV of the NPV of the
S MWh Revenue SIMWh Revenue
Requirement Requirement
100 MW P PA
100 MW ESA
By comparing the NPV of the existing to the one can see
that the PPA 1 has I The
ESA1 has a Considered together,
the
SUPPLEMENTAL STAFF COMMENTS 4 OCTOBER 3, 2025

4. System Need and LC-LR Determination
In its original comments for this case, Staff stated that the Company's system"faces a
capacity deficit in 2027." Staff Comments at 2. Staff reaffirms its conclusion from its first set of
comments that the Company's system faces a significant capacity deficit beginning in 2027 and
that additional resources are needed to remedy the deficit.
Given the potential described above, Staff would normally re-evaluate
Crimson Orchard by comparing it to the nearest-priced competitive bids from the Company's
Request for Proposal ("RFP"). Because each project submitted for bid may be subject to
different levels , Staff would include in its
comparisons. However, Staff believes the issue is moot because, as the Company stated, there
are no viable competitor projects. Supplemental Application at 10, Response to Staff s
Production Request No. 25. Therefore, because Crimson Orchard is the only viable project that
can be online to meet the Company's 2027 capacity deficit, by definition, the project is the LC-
LR project.
However, Staff objects to the recurring dilemma of having to declare a project to be LC-
LR because it is the only viable project. This is the third consecutive case in which the Company
has requested approval of a new resource that is the only viable option. The previous two cases
were IPC-E-24-45 and IPC-E-24-46.
5. Company Decisions Have Contributed to the Situation
Staff believes several Company decisions have contributed to the current situation of last-
minute projects with zero alternatives.
Capacity Deficits in 2023-2025
Staff believes the problem surfaced during development of the 2021 Integrated Resource
Plan("IRP"). It was during this planning exercise that the Company belatedly recognized that its
system was already in deficit, but to acquire new resources within acquisition lead-time, it
established a 2023 capacity deficit date. 2021 IRP, Staff Comments at 4. Because the time to
acquire resources can range widely—from two to more than five years—addressing a capacity
deficit only two years away forced the Company to pursue solutions that could be implemented
within the lead-time available. Staff believes this eliminated resource alternatives requiring
SUPPLEMENTAL STAFF COMMENTS 5 OCTOBER 3, 2025

longer lead-times from consideration that could have been lower cost had the deficit been
identified earlier. Continuous baseline growth in the Company's service area has created
additional capacity needs each subsequent year, perpetuating the problem of only being able to
solicit resources that can be quickly placed in service. The Company has filed consecutive
requests to acquire resources to be online in 2023,1 2024,2 and 2025.3
Special Contracts: Primary Cause of Capacity Deficits in 2026 and 2027
While the Company was chasing baseline capacity deficits from 2023 through 2025, it
signed several special contracts with customers that committed the Company to serve additional
large loads in 2026 and beyond. Staff observes that the capacity deficits in 2026 and 2027 are
primarily being caused by these new large-load customers, with small contributions of future
deficits attributed to existing customer classes. Draft 2025 IRP, Appendix C, at 7-9.
Competing CoMpany Commitments
Although the Company has an obligation to serve new customers within its service
territory, the Company also has an obligation to ensure system reliability at just and reasonable
rates for all its customers. When the Company agreed to serve the large new loads in 2026 and
beyond, it committed to a time frame that left little time for schedule delays or project setbacks.
Because of the current situation, Staff believes the Company was too optimistic about when new
resources could be in place to meet these new large loads.
The Company's 2023 IRP Near-Term Action Plan called for the construction of the
Boardman-to-Hemingway (`B2H") transmission line by June 2026, in conjunction with
additional economic resources. 2023 IRP at 8. As discussed later, the B2H transmission line has
been delayed 18 months or more, forcing the Company to accelerate other resource acquisitions.
In addition, the Company's efforts to solicit additional resources has been met with mixed
results. To meet the large increase in load, the Company has filed multiple consecutive requests
to acquire resources to be online in 2026,4 and 2027,5 with three of them being"zero-
' Case Nos.IPC-E-22-06 and IPC-E-22-13.
2 Case Nos.IPC-E-23-05 and IPC-E-23-20.
3 Case Nos.IPC-E-22-29 and IPC-E-23-20.
4 Case Nos.IPC-E-24-01,IPC-E-24-16 and IPC-E-24-45.
5 Case Nos.IPC-E-24-42,IPC-E-24-46,and IPC-E-25-10.
SUPPLEMENTAL STAFF COMMENTS 6 OCTOBER 3, 2025

alternative" cases. Furthermore, the 2027 capacity deficit is still not resolved, requiring one or
more additional cases for new resources to be filed. Ellsworth Direct at 12
Boardman to Hemingway Delay
In the 2023 IRP, B2H was identified as an essential new resource to resolve the capacity
deficit in 2026 and beyond. It was supposed to provide 500 MW of summer capacity beginning
in June 2026. The IRP analysis showed that a mere six-month delay in completing B2H
(November 2026) would add$20 million to the Company's costs.6 The analysis showed that
failing to construct B2H would add $836 million to the Company's costs.7
In the Company's application for a Certificate of Public Convenience and Necessity for
B2H, Staff identified numerous project risks for the B2H project, including multiple schedule
risks. Case No. IPC-E-23-01, Staff Comments at 9-12. In its Reply Comments, the Company
agreed with Staffs assessment of the risks. Reply Comments at 6. In other words, the Company
knew the risks associated with delivering B2H in 2026 but committed to serve the large new load
in 2026 anyway.
As part of this case, Staff asked for the latest status of 132H. The Company stated that the
anticipated in-service date will be no earlier than late 2027 [emphasis added]. Response to
Staff Production Request No. 24. Staff believes that the B2H project delay of 18 months (or
more) is materially contributing to ongoing capacity deficits, the lack of viable options, and
therefore, increased cost risks to existing customers.
Limited Types of Resources
In addition to B2H delays, the Company has encountered setbacks in procuring carbon-
clean resources. Over the past nine months the Trump Administration has implemented several
policy changes that are detrimental to carbon-clean resources, including new tax credit deadlines,
volatile tariffs, and permitting delays. These are in addition to the normal problems of
interconnection approvals, environmental studies, and conditional use permits. The cumulative
effect has been the elimination or delay of many carbon-clean resource projects.
6 Idaho Power 2023 IRP,Table 10.2.
Id.
SUPPLEMENTAL STAFF COMMENTS 7 OCTOBER 3, 2025

Staff believes the Company's decision to de-emphasize natural gas ("NG") resources in
its 2026-2027 REP contributed to making the current situation worse. In an earlier"zero
alternative" case, Staff stated,
One of Staff s primary concerns was the limited set of resources that the Company
would accept in its solicitation. Section 3.1 of the 2026-2027 All-Source RFP listed
eligible products, and the Company identified eight resource types. Only one of
these eight resource types was based on gas, despite the affordability,
dispatchability, and reliability offered by gas plants. Furthermore, the Company
conditioned the sole gas-based option to be "Gas-fired Convertible to Hydrogen."
In fact, only one of the initial 192 RFP bids was this resource type.
Case No. IPC-E-24-46, Staff Comments at 3-4.
Staff believes that if the Company had properly solicited for all resource types, more NG
proposals may have been submitted. NG resources would not be subject to the same volatility
from tax credits, tariffs, and federal permitting, so it is reasonable to assume that NG-based
project proposals would still be viable even though many carbon-clean projects have been
canceled. Furthermore,NG-based projects submitted two years ago would have avoided the
current demand crisis that is emerging for NG-based projects today.
6. Ratepayers Should Not Bear
Considering the Company's circumstances and the decisions it made that are contributing
to those circumstances, Staff believes it is reasonable for the Company to bear a proportional
amount of the risk-related consequences rather than placing the risk entirely on ratepayers.
Ratepayers are already enduring a series of rate increases caused by baseline growth and
inflation.
Staff recommends that expenses be determined prudent
SUPPLEMENTAL STAFF COMMENTS 8 OCTOBER 3, 2025

STAFF RECOMMENDATION
Staff recommends that the Commission:
1. Approve PPA1;
2. Approve ESA 1;
3. Approve future payments —
—as prudently incurred expenses for rate-
making purposes once each system is in service;
4. Acknowledge the use of lease accounting for ESA1; and
5. Exclude the Purchase Options in PPA 1 and ESA 1 from the determination of prudence.
Respectfully submitted this 3rd day of October 2025.
El wl
Erika K. Melanson
Deputy Attorney General
Technical Staff: Matt Suess
1:\Utility\UMISC\COMMENTS\IPC-E-25-10 Supplemental Comments-Redacted.docx
SUPPLEMENTAL STAFF COMMENTS 9 OCTOBER 3, 2025

CERTIFICATE OF SERVICE
r%
I HEREBY CERTIFY THAT I HAVE THIS DAY OF OCTOBER 2025, SERVED
THE FOREGOING REDACTED SUPPLEMENTAL COMMENTS OF THE
COMMISSION STAFF, IN CASE NO. IPC-E-25-10, BY E-MAILING A COPY THEREOF
TO THE FOLLOWING:
DONOVAN E. WALKER TIM TATUM
LEAD COUNSEL VP, REGULATORY AFFAIRS
IDAHO POWER COMPANY IDAHO POWER COMPANY
PO BOX 70 PO BOX 70
BOISE ID 83707 BOISE ID 83707
E-MAIL: dwalkerbidahopower.com E-MAIL: ttatumOidahopower.com
dockets aNdahopower.com
Idaho Irrigation Pumpers Assn, Inc. Idaho Irrigation Pumpers Assn, Inc.
Eric L. Olsen Lance Kaufinan, 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(aaegisinsight.com
Pocatello, ID 83205
E-MAIL: elo(wechohawk.com
Micron
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Kristine A.K. Roach
Holland & Hart, LLP
555 171h Street, Suite 3200
Denver, CO 80202
E-MAIL:
darueschhofK@
,hollandhart.com
tnelson t,hollandhart.com
awjensen a,,hollandhart.com
karoach,c hollandhart.com
aclee(c-chol landh art.com
f
PATRICIA JORD SECRETARY
CERTIFICATE OF SERVICE