20251202Closing Brief - Redacted.pdf

RECEIVED
DECEMBER 2, 2025
IDAHO PUBLIC
UTILITIES COMMISSION
Eric L. Olsen(ISB#4811)
ECHO HAWK& OLSEN, PLLC
505 Pershing Ave., Ste. 100
P.O. Box 6119
Pocatello, Idaho 83205
Telephone: [phone]
Facsimile: [phone]
Email: elo(a)echohawk.com
Attorney for Intervenor Idaho Irrigation Pumpers Association, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER CASE NO. IPC-E-24-44
COMPANY'S APPLICATION FOR
APPROVAL OF A SPECIAL CONTRACT IDAHO IRRIGATION PUMPERS
AND TARIFF SCHEDULE 28 TO PROVIDE ASSOCIATION, INC.'S CLOSING
ELECTRIC SERVICE TO MICRON IDAHO BRIEF
SEMICONDUCTOR MANUFACTURING
(TRITON) LLC
Idaho Irrigation Pumpers Association, Inc. ("IIPA"), by and through counsel, hereby
respectfully submits its Closing Brief to the Commission.
I. INTRODUCTION AND RECOMMENDATIONS
Idaho Power Company("IPC")has asked the Commission to find that a 0.03583 ($/kWh)
energy charge, a $3.17 contract demand charge, a $14.20 billing demand charge, and the other
terms of the proposed Micron FAB Special Contract ("Micron ESA") are "reasonable, consistent
with cost of service determinations, and in the public interest."' IPC claims that the ESA terms
"appropriately recover the cost of providing service to the Micron FAB facility,while limiting the
potential for cost shifting between the Micron FAB ESA and the Company's other customer
classes. ,2 At the hearing, IPC principally relies on marginal cost energy pricing, on its updated No
Harm Analysis ("NHA"), and its contractual minimum billings and termination payments to
1 Application at¶¶30&31 (italics added).
2 Id.(italics added).
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CASE NO.IPC-E-24-44

support its claim that the ESA's terms limit the potential to shift the costs to serve Micron over to
IPC's other customer classes.3
IPC also states that if the NHA had shown harm, IPC "would have evaluated alternative
pricing structures at the time when we were reviewing that."4 IIPA has provided substantial,
competent evidence at the hearing that the ESA's terms would harm existing customers by
unreasonably shifting costs reasonably allocable to Micron's unprecedented load to other customer
classes.
To avoid this harm and to ensure the "growth pays for growth", IIPA implores the
Commission to order that the rates of existing IPC customers should not increase because of new
large loads subject to an ESA. To enable this outcome, the Commission should order IPC to
identify and allocate to Schedule 28 all incremental costs associated with planning for and serving
the Micron ESA load in its General Rate Case ("GRC"). The Commission should order IPC to
follow this standard when assessing or entering into any new special contracts.
IIPA's recommendations fall into three separate groups. First, the recommendation above,
that IPC should be ordered to identify incremental costs, is intended to clarify to parties that the
Commission agrees with the principle that existing customers should not be harmed, and to begin
movement towards achieving that principle.All participants in this proceeding appear to agree that
existing customers should not be made worse off as a result of the Micron ESA. IIPA is concerned
that without specific direction in this case to IPC about the treatment of incremental costs,the next
general rate case will exhibit a rehashing of the issues addressed in this docket rather than
incremental movement towards just rates.
3 Id.
4 Transcript Vol II at 360:10-11.
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CASE NO.IPC-E-24-44

The second set of recommendations relate to areas where IIPA finds areas of acceptable
compromise. IIPA recommends that (i) the concerns raised by IIPA regarding marginal energy
costs,including long run impacts of the Micron ESA on energy costs and the risk of net power cost
forecast error be addressed in a separate docket, (ii)that the demand charge of- as filed by
IPC in response to IIPA DR 5-2, be accepted as a temporary compromise on the monthly billing
charge pending the development of a revised incremental cost allocation model, and(iii)that cost
allocation for the Micron ESA's demand costs be addressed in a future docket.
The third set of recommendations consist of Micron ESA or tariff modifications that should
be made to ensure that future rate cases do not expose customers to unjust costs. IIPA intreats the
Commission to revise the ESA's terms (i) to provide for a 0.057 ($/kWh) energy charge as a
temporary energy charge pending the outcome of the marginal energy cost docket, (ii) to amend
ESA Section 13.2 to ensure that the ESA's"rates and methodologies"are subject to further revision
by Commission, (iii) to amend ESA section 7.2 to clarify that the marginal cost energy rate may
address short-run or long-run marginal costs,(iv)to amend ESA Section 3.3 to provide a minimum
termination payment equal to the 5 year average demand, energy and rates as of the date of ESA
termination to protect IPC and its customers from the Micron revenue loss, and(v)to adopt all of
Staff's proposed revisions to terms of the Micron ESA.
H. REGULATORY POLICY MUST CHANGE TO ENSURE GROWTH
PAYS FOR GROWTH
In response to extraordinary customer growth, IPC has embarked on $5.6 Billion capital
spending plan for 2025 to 2029 (the "Capital Plan") to acquire the necessary generation,
transmission, and system upgrades.'These upgrades are to primarily serve Micron and other new
5 IIPA Ex.220(Excerpts of 9/25 IPC hivestor Outreach)pp.4, 17,42&44.
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CASE NO.IPC-E-24-44

large load customers such as Meta (Brisbie), Lamb Weston, and other Addition Firm Loads
("AFLs") modeled in IPC's 2025 IRP.6 Representative Mickelsen described IPC's growth as
"transformational" and analogous to "adding a shark to a family's fish tank" such that tradition
rate making policies must change to address this new "landscape".7 CEO's Michael Heckler
described Micron's load as "unprecedented" and "transformational" and analogous to adding a 6
foot sturgeon to a goldfish tank such that Idaho's regulatory policy must be "adapted" to require
that incremental costs to serve Micron be allocated to Micron and other cost causers in a way the
other customer classes are not harmed nor benefited.8 How the Commission directs IPC to address
the cost recovery of IPC's unprecedented Capital Plan in relation to approving, modifying, or
rejecting the Micron ESA is the central, overriding policy decision that the Commission must
directly address in this case.
IPC wants to keep the status quo and only partially allocate incremental costs to serve the
Micron FAB (and other new large load customers) based on its (their) load ratio share of the
"embedded system costs reflected in a respective test year revenue requirement in a general rate
case."9 IPC's methodology is expressly designed to not assign direct, incremental transmission,
generation and system upgrade costs to serve the Micron FAB's unprecedented load because IPC
claims that these extraordinary Capital Plan investments are system resources used by all
customers.10 However, the continued application of this outdated cost allocation methodology to
assign IPC's Capital Plan costs will not ensure that"Growth will pay for Growth",will cause harm
through the unjust and unreasonable cost shifting to other rate classes, and will result in
6 IPC-E-25-23—IIPA's 2025 IRP Comments,at 6-9.
7 Trans.Vol.II,p.294,lls. 11-25,p.295,lls. 1-9.
8 Trans.Vol.III,pp. 786&787,lls. 1-18;p. 800,lls. 13-25,p. 801 to 803, Ils. 1-16.
9 Trans.P.210,Anderson Surrebuttal,lls.2-9.
10 Id. at lls. 13-20.
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CASE NO.IPC-E-24-44

Commission adopting flawed electric regulatory policy. Of necessity then, traditional embedded
cost of service principles to allocate IPC's coming title wave Capital Plan expenditures to serve
new large loads like Micron, Meta and other AFLs must give way to new marginal cost allocation
methods.
Dr. Kaufman has provided substantial, competent evidence that the cost of serving the
Micron ESA is substantially higher than the Micron ESA rates are designed to recover.
Commission intervention on the Schedule 28 tariffs, and the governing Micron ESA language, is
necessary to ensure that the filed ESA rates do not become an anchor that prevent future cases
from aligning the Micron ESA costs and rates. The GRC is typically overwhelmed with issues."
The initial tariff rate will create a starting point from which subsequent rate cases will be judged.12
The inertia associated with an excessively low starting rate can be overcome by direct guidance
from the Commission, in this case, that future GRC filings are to include calculations of growth
related incremental generation and transmission costs.
Representatives Mickelsen and Garner have asked the Commission to apply the
incremental cost allocation principles found in HB 395 and a similar alternative legislative
proposal to allocate growth costs associated with Micron's and other customers'new large load.13
Specifically, HB 395 was patterned after the New Large Single Load ("NLSL") policy found in
the Pacific Northwest Planning and Conservation Act Power Act(the"Northwest Power Act")and
its enacting regulations.14 Under the Northwest Power Act, NLSL(i.e., new loads in excess of 10
MW in a 12 month period) are subject to marginal cost pricing to ensure that the embedded costs
11 White cross at PP 728-729.
12 Transcript Vol III 655:1-15.
13 Trans.,Mickelsen&Garner Jt.Testimony,PP.279,lls. 8-25 &Ex.204;P.282,lls.3-9&Ex.205;P.
283,lls. 9-18.
14 Trans.,Mickelsen Redirect,P.305,lls.21-25 &P. 306, Hs. 1-12;Kaufman Surrebuttal,P. 576, lls. 1-11
&Ex.210.
IDAHO IRRIGATION PUMPERS ASSOCIATION,INC.'S CLOSING BRIEF—Page 5
CASE NO.IPC-E-24-44

of the federal hydropower system are preserved for the benefit of residential and farm loads and
to ensure that new industrial loads adopt energy efficient processes and designs.15
Staff witness,Michael Eldred,acknowledges the limitations of pricing Micron's ESA based
on average embedded system Costs.16 These limitations occur when IPC has a new large load like
Micron that has significantly higher load growth rates than other customer classes.17 This
disproportionate growth results in higher costs resources on a per kW basis than IPC's existing
resources and can adversely affect other customer classes that have lower or little growth.18 Mr.
Eldred recommends that higher than system average growth costs not be allocated the embedded
cost of each customer classes' load share, but the load could allocated based on the incremental
growth of each customer class.19
Now is the time for the Commission to adapt to a changing regulatory environment and
show the Idaho Legislature that it knows how to properly assign growth costs associated with
Micron's and other customers'new large loads. To make sure that"growth pays for growth", IIPA
implores the Commission to order IPC to identify and allocate to Schedule 28 all incremental costs
associated with serving the Micron ESA load in its subsequent general rate or cost allocation cases
and when IPC is assessing or entering into any new special contracts.
15 Trans.,Kaufman Surrebuttal,P. 576,Ex.210,PP. 3-4.
16 Trans.,Eldred Direct,P. 8,lls. 5-25,P. 9,lls. 1-10.
17 Id.
18 Id.
19 Trans.,Eldred Surrebuttal,P. 851,lls. 14-15.
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CASE NO.IPC-E-24-44

M.THE MICRON ESA TERMS MIDST BE REVISED TO
AVOID HARM TO IPC'S OTHER RATE CLASSES
A. The Micron ESA Causes Harm to other Customer Classes. EPA evaluated the cost of
the Micron ESA under multiple modeling approaches. The IRP model,which uses commission
vetted long run cost models, shows the incremental cost of the Micron ESA to be $95 per
MWh.20 The recent]]PC CPCNs show incremental costs to be per MWh.21 The
CCCT Model presented by Mr. Gorman, after modifying to use IPC's gas price forecast and
expected CCCT capacity factor, show incremental costs to be per Nm.22
IPC's No Harm Analysis,when corrected for missing costs and modeling errors, shows a harm of
23
In addition to these direct measures of the cost of generation, customers face indirect
costs, such as increased rate of return on rate base due to higher credit risk24 and additional
financial risk. These factors combine to demonstrate that the Micron ESA causes harm to other
customers, and its rates are not fair,just, and reasonable.
B. IPC's No Harm Analysis is Flawed. IIPA identified material flaws with the Company's
NHA in its initial round of comments on March 24, 2025. Despite this notice, IPC declined to
address these concerns until its final round of testimony,25 preventing IIPA and other parties from
providing prefilled testimony on the revised model. However,the revised NHM model continued
to contain many errors and is highly sensitive to corrections.At the hearing IIPA submitted a set
of exhibits illustrating the impact of separately addressing each of the outstanding flaws of the
20 IIPA-Kaufman,Di at 5:10.
21 IIPA-Kaufman,Di at 5:21.
22 IIPA Exhibit 209.
23 IIPA Exhibit 217 at 19.
24 IIPA-Kaufman,Su at 26:24-25.
25 Anderson,Surrebuttal Testimony Exhibit No.3
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CASE NO.IPC-E-24-44

model.26 These exhibits demonstrate that IPC's NHA model is highly sensitive because every
modification reversed the model's finding from"no harm"to "harm exists."
Jackelope Resource Replacement
IPC's NHA excludes the cost impact of wind and solar facilities. This results in an
incomplete cost analysis and makes the model sensitive to the type of resources acquired to serve
the Micron ESA. One major resource added to the "with micron" scenario is the Jackelope wind
project. When the Jackelope project,which has been canceled, is replaced with any type or size
of gas facility, the "with-Micron" scenario shows increased harm to existing customers. This is
because removing Jackelope has no cost impact in the model,27 while adding any gas resource28
increases the "with-Micron" cost, resulting in a strictly higher revenue requirement for the "with-
Micron" scenario.29
Incremental Transmission Costs
IPC asserts that the total IPC long run transmission revenue requirement under the"with
Micron"transmission is identical to the "without Micron" scenario. However, at the hearing,
IIPA demonstrated that the new Mayfield substation is positioned directly adjacent to the new
Micron FAB.30 The Mayfield substation ties Gateway West to the lower voltage transmission
lines feeding Micron.31 The Gateway West facilities have a 1000 MW capacity,32 indicating that
Micron accounts for 50 percent of the capacity of these facilities. IIPA also demonstrates that the
No Harm analysis does not include the transmission costs necessary to move energy from the
26 IIPA Exhibits 211,and 213 through 218.
27 See IIPA Exhibit 214 which shows no change when the Jackelope resource is removed.
28 Transcript at 475:1-4.
29 IIPA Exhibit 215.
30 Transcript at 123:22 to 124:23.
31 Transcript at 123:22 to 124:23.
32 Transcript at 121:24.
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interconnection sites of 1,794 MW of new resources to Micron.33 IIPA models the impact of
acknowledging incremental transnussion costs by removing a portion of the Gateway West and
Mayfield substation costs fi-om the"No-Micron" scenario.34 This change reversed the direction
of the analysis and demonstrates that harm exists.35
Contract Capacity Revenue Allocations
Several days prior to the hearing IPC filed a replacement of Anderson Exhibit No. 3. This
replacement addressed some of the errors that IIPA had identified with the surrebuttal exhibit.36
However, absent additional changes outside of error corrections, the revised exhibit reverses the
fording of the analysis and demonstrates that harm exists. The Revised Exhibit filed by IPC
includes both corrections to errors and a change m the parameters used to allocate revenue
requirement from billed demand to contract demand. This is not a correction of an error but a
revision of the modeling methodology. IIPA Exhibit 213 provides the results of the NHA when
the original billing demand methodology is used for allocating costs. This exhibit demonstrates
that IPC's corrections,when isolated fi-om other modeling changes, lead to a fording of harm.
Combined impact of IIPA Adjustments
The combined impact of addressing Jackalope, Transmission, and Revenue Allocation is
included in Exhibit 217. This exhibit shows a harm of over the ten year period.
C. Address Billing Demand Charge. IIPA subunitted a proposed set of rates for Schedule
28 at the technical hearing. These rates were designed to recover$95 per MWh, which is a
conservatively low estimate of the incremental cost to serve the Micron ESA. The IIPA proposed
33 Transcript at 609:7-9.
34 IIPA Exhibit 216.
35 IIPA Exhibit 216.
36 Transcript at 485-486.
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CASE NO.IPC-E-24-44

a rate spread the recover of this cost between both demand and energy charges,with(i) a 0.057
($/kWh)energy charge, (ii) a 3.17 contract demand charge, and a(iii)21.90 billing demand
charge.At the hearing, Staff suggested that the Schedule 28 demand charge could be updated to
reflect the 2025 General Rate Case.37 In response to discover and email communications,IPC
indicated that this 2025 GRC update revises Schedule 28 contract demand to_ and billing
demand to-While this remains below the level proposed by IIPA, it is sufficiently close to
our requested outcome that IIPA is comfortable accepting the revised contract and billing
demand rates. However, IIPA intends to argue that Schedule 28 should not be subjected to rate
spread caps in the next general rate case to ensure that the demand rate can move directly to cost
of service once incremental costs are agreed to.
EPA continues to recommend the energy charge of 0.057 ($/kWh). This charge is
consistent with the incremental energy costs of the new energy resources that IPC is procuring to
serve the Micron ESA. Moreover,parties have agreed to a separate docket to study long run
marginal costs, and this rate could be updated in that docket.
A Contract Guardrails. IIPA feels that of the outstanding issues in this case,the another
important issue for the Commission to consider in this case is the risk of stranded assets and
financial instability.While Schedule 28 rates may be revised in future rate cases,there is no clear
path to remedying flaws in the Micron ESA guardrails outside of this docket. IIPA identified a
very real possibility of financial insolvency associated with an unexpected termination of the
Micron ESA.38
37 Transcript at 869:2-5.
38 Transcript at 522:13 and 611-616.
IDAHO IRRIGATION PUMPERS ASSOCIATION,INC.'S CLOSING BRIEF—Page 10
CASE NO.IPC-E-24-44

IIPA has proposed additional customer protection in the form of a floor to the Micron
ESA Termination Fee.39 IIPA's recommendations address different financial risks than Staff's
recommendations regarding Monthly Minimum contract ramps. The Commission should
approve both Staff's and IIPA's recommendations to ensure ratepayers have a reasonable level of
protection against contract termination risk.
IV. CONCLUSION
For the foregoing reasons, respectfully requests that the Commission adopt IIPA's
recommendations laid out in Section I in order to avoid the unjust shifting costs associated with
serving the Micron ESA to other customer classes and to adopt sound regulatory policy to IPC
and its customers ever changing energy needs.
DATED this 2nd day of December, 2025.
ECHO HAWK& OLSEN
ERIC L. OLSEN
39 Transcript at 471:12-17.
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CERTIFICATE OF SERVICE
I HEREBY CERTIFIY that on this 2nd day of December, 2025, I served a true, correct
and complete copy of the Idaho Irrigation Pumpers Association, Inc.'s Closing Brief to each of
the following, via the method indicated below:
Monica Barrios-Sanchez, Commission Secretary ❑ U.S. Mail
Idaho Public Utilities Commission ❑ Hand Delivered
P.O. Box 83720 ❑ Overnight Mail
Boise, ID 83720-0074 ❑ Telecopy(Fax)
secretgagpuc.idaho.gov ® Electronic Mail (Email)
Chris Burdin ❑ U.S. Mail
Deputy Attorney General ❑ Hand Delivered
Idaho Public Utilities Commission ❑ Overnight Mail
P.O. Box 83720 ❑ Telecopy(Fax)
Boise, ID 83720-0074 ® Electronic Mail (Email)
Chris.burding]2uc.Idaho.gov
Megan Goicoechea Allen ❑ U.S. Mail
Donovan E. Walker ❑ Hand Delivered
Connie Aschenbrenner ❑ Overnight Mail
Grant Anderson ❑ Telecopy(Fax)
Idaho Power Company ® Electronic Mail (Email)
1221 W. Idaho Street (83702)
P.O. Box 70
Boise, ID 83707
mgoicoecheaallengidahopower.com
dwalker(ab,idahopower.com
dockets gidahopower.com
caschenbrenner(ab,idahopower.com
gandersong idahopower.com
Lance Kaufman, Ph.D. ❑ U.S. Mail
Idaho Irrigation Pumpers ❑ Hand Delivered
2623 NW Bluebell Place ❑ Overnight Mail
Corvallis, OR 97330 ❑ Telecopy(Fax)
lancegae isg insi ht�com ❑ Electronic Mail (Email)
Austin Rueschhoff ❑ U.S. Mail
Thorvald A. Nelson ❑ Hand Delivered
Austin W. Jensen ❑ Overnight Mail
Kristine A.K. Roach ❑ Telecopy(Fax)
Holland& Hart, LLP ❑ Electronic Mail (Email)
IDAHO IRRIGATION PUMPERS ASSOCIATION,INC.'S CLOSING BRIEF—Page 12
CASE NO.IPC-E-24-44

Micron Technology, Inc.
555 17th Street Suite 3200
Denver, CO 80202
darueschhoff khollandhart.com
tnelson&hollandhart.com
awj ensen(&hollandhart.com
karoachghollandhart.com
acleeka,hollandhart.com
Peter J. Richardson ❑ U.S. Mail
Richardson, Adams, PLLC ❑ Hand Delivered
Industrial Customer of Idaho Power ❑ Overnight Mail
515 N. 27th St. ❑ Telecopy(Fax)
P.O. Box 7218 ® Electronic Mail (Email)
Boise, ID 83702
peterna,richardsonadams.com
Dr. Don Reading ❑ U.S. Mail
Industrial Customer of Idaho Power ❑ Hand Delivered
280 S. Silverwood Way ❑ Overnight Mail
Eagle, ID 83616 ❑ Telecopy(Fax)
dreadingkmindspring.com ❑ Electronic Mail (Email)
Courtney White ❑ U.S. Mail
Mike Heckler ❑ Hand Delivered
Clean Energy Opportunities for Idaho ❑ Overnight Mail
3778 Plantation River Drive, Suite 102 ❑ Telecopy(Fax)
Boise, ID 83703 ® Electronic Mail (Email)
courtney(a),cleanenerg opportunities.com
mikekcleanenergopportunities.com
Kelsey Jae (ISB No. 7899) ❑ U.S. Mail
Clean Energy Opportunities for Idaho ❑ Hand Delivered
920 N. Clover Dr., Boise, ID 83703 ❑ Overnight Mail
kelsey(ab,kelseyjae.com ❑ Telecopy(Fax)
® Electronic Mail (Email)
ERIC L. OLSEN
IDAHO IRRIGATION PUMPERS ASSOCIATION,INC.'S CLOSING BRIEF—Page 13
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