20251125Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER LODGE
COMMISSIONER HAMMOND
COMMISSIONER HARDIE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: YAO YIN, COMMISSION STAFF
ERIKA K. MELANSON,DEPUTY ATTORNEY GENERAL
DATE: NOVEMBER 25, 2025
RE: IN THE MATTER OF IDAHO POWER COMPANY'S TARIFF ADVICE
NO. IPC-TAE-25-02 REVISIONS TO SCHEDULE 87, INTERMITTENT
GENERATION INTEGRATION CHARGES; CASE NO. IPC-TAE-25-02.
BACKGROUND
On November 7, 2025, Idaho Power Company("Company") submitted a proposed update
to Schedule 87, Intermittent Generation Integration Charges ("Schedule 87") to the Idaho Public
Utilities Commission("Commission") for approval.
Schedule 87 is applicable to qualifying facilities ("QFs") under the Public Utility
Regulatory Policies Act of 1978 that have generation of an intermittent nature, such as wind and
solar QFs. In the current Schedule 87, different rates are applied based on the penetration level of
wind or solar in the Company's system. Specifically, for wind integration charges,the penetration
levels used are 725.82 megawatts ("MW") to 825.81 MW and 825.82 MW to 925.81 MW. For
solar integration charges, the penetration levels used are 683.38 MW to 783.37 MW and 783.38
MW to 883.37 MW.
The proposed update replaces the penetration levels with the incremental capacity blocks
of newly contracted resources. For both wind and solar,the Company proposes to use incremental
capacity blocks of 0 to 100 MW and 100 MW to 200 MW, with an effective date of December 7,
2025.
DECISION MEMORANDUM - 1 - NOVEMBER 25, 2025

STAFF REVIEW
Staff has reviewed the Company's proposal to change the Schedule 87 integration rate
structure with penetration levels that are relative to changing baseline amounts over the 20-year
planning horizon, which are based on assumptions of whether existing wind or solar QFs will
renew their contracts. Staff has thoroughly reviewed the Company's Tariff Advice Application
and believes that its proposal corrects the tariff to reflect how integration charges should be
applied.
The Schedule 87 integration rates were developed using the Company's AURORA
production cost modeling software and is based on a revised version of the 20-year preferred
portfolio developed in the 2023 Integrated Resource Plan.' The Company's Schedule 87 tariff was
developed by including the existing penetration levels of wind and solar on the Company's system
at the start of the 20-year planning horizon as the starting baseline amounts, and then increased the
penetration levels by an incremental 100 MW block up to 200 MW. For example, the lower set
of wind integration charges were determined by the penetration level ranging from 725.82 MW to
825.81 MW, and the higher set of wind integration charges were determined by the penetration
level ranging from 825.82 MW to 925.81 MW.
However, when the Company translated the modeling results into the format for Schedule
87, it neglected to take into account its assumption that none of the wind projects would renew
their contracts during the planning time horizon. In other words, as wind QFs expire over time,
the starting baseline wind penetration level in the model will decrease over the planning horizon,
instead of being fixed at a constant amount. Because the current format of Schedule 87 assumes
the starting baseline remains fixed over time, applying the integration charges based on the fixed
baseline can cause a QF to fall out of the applicable range of the schedule, even though the
integration charges are actually applicable. A hypothetical example is presented to illustrate the
issue.
' The 2023 Integrated Resource Plan Preferred Portfolio used to determine integration rates was the portfolio titled
"November 2026 B21-1 Valmy 1 &2."
DECISION MEMORANDUM - 2 - NOVEMBER 25, 2025

Penetration Level (MW)
Baseline Penetration Amount at End of 2023 725.82
Wind Contracts Expiring by End of 2025 150.00
Baseline Penetration Amount at End of 2025 575.82
New 25 MW Contract in 2026 25.00
Penetration Level of New 25 MW Contract 600.82
In this example, the baseline penetration level at the end of 2023 is 725.82 MW. For any
new wind QF contract in 2024, if any, the current tariff would supply the correct rate. (For the
simplicity of the example, we assume there is no new wind QF added onto the system in 2024).
However,because of the 150 MW of expiring contracts in 2025 reflected in the Company's model,
the new baseline amount at the end of 2025 should be 575.82 MW. As a result, the applicable
ranges of the integration charges at that time should be 575.82 MW to 675.81 MW for the lower
set of rates and 675.82 MW to 775.81 MW for the higher set of rates. Therefore, if a new 25-MW
wind contract is signed in 2026, the applicable integration charge should be the lower set of rates
falling within the penetration level from 575.82 MW to 675.82 MW. However, according to the
current Schedule 87, which starts at 725.82 MW, the lower set of rates would not be applicable to
the 25-MW contract, because the 575.82-MW penetration level is outside the applicable range of
the schedule.
To rectify the problem,the Company has proposed to continue to provide rates in 100-MW
and 200-MW capacity increments,but instead of defining the penetration levels using ranges based
on the absolute amounts, it proposes to define the range based on the incremental capacity size of
new resources (i.e. 100 MW or 200 MW of new resources) relative to the changing baseline
reflected in the model. Carrying out the example used above,the table below compares the format
of absolute ranges of penetration levels versus the format of incremental capacity size of new
resources.
DECISION MEMORANDUM - 3 - NOVEMBER 25, 2025

End of Baseline Current Absolute Ranges Proposed Ranges Relative
Modeled (MWs) (2025 and 2026 ranges corrected to Baseline and Modeled
Year in the for changing baseline penetration Year
Revised levels)
Preferred 1" 100 MW 2nd 100 MW I st 100 MW 2nd 100 MW
Portfolio Block of Block of Block of Block of
Penetration Penetration Increased Increased
Penetration Penetration
2023 725.82 725.86 - 825.82 825.82 - 925.82 0- 100 100 - 200
2024 725.82 725.86 - 825.82 825.82 - 925.82 0- 100 100 - 200
2025 575.82 575.82 - 675.82 675.82 - 775.82 0- 100 100 - 200
2026 575.82 575.82 - 675.82 675.82 - 775.82 0- 100 100 - 200
The Company has also proposed to redefine the applicable range of solar integration
charges in Schedule 87 to emulate the format proposed for wind. In the case of solar,the Company
assumed that all solar contracts would renew after their contracts expire within the Company's
model. Because of this assumption, the baseline penetration levels are constant throughout the
planning horizon and the rate structure using the currant absolute ranges are still correct. However,
to ensure the tariffs for wind and solar are consistent and to eliminate confusion that could occur
with two different types of applicable ranges, Staff believes it is reasonable to apply the same form
of applicable ranges to solar. In addition, the new applicable range does not affect how solar
integration charges are applied,because both types are interchangeable for solar. Therefore, Staff
recommends that the applicable ranges of solar integration charges be changed as proposed.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Company's proposed revisions to
Schedule 87 with an effective date of December 7, 2025.
DECISION MEMORANDUM - 4 - NOVEMBER 25, 2025

COMMISSION DECISION
Does the Commission wish to approve the Company's proposed revisions to Schedule 87
with an effective date of December 7, 2025?
J IJ-4
Yao Yin
Utilities Analyst II
I:\Utility\UDMEMOS\IPC-TAE-25-02 Decision Memo.docx
DECISION MEMORANDUM - 5 - NOVEMBER 25, 2025