20251211Reply Comments.pdf

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RECEIVED
LISA C. LANCE DECEMBER 11, 2025
Corporate Counsel IDAHO PUBLIC
Ilance(a)idahopower.com UTILITIES COMMISSION
December 11, 2025
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-25-33
Idaho Power Company's Annual Compliance Filing to Update the Load and
Gas Forecast in the Incremental Cost Integrated Resource Plan Avoided Cost
Model
Dear Commission Secretary:
Attached for electronic filing is Idaho Power Company's Reply Comments in the
above-entitled matter.
If you have any questions about the attached document, please do not hesitate to
contact me.
Sincerely,
lorl- C"d�_
Lisa C. Lance
LCL:cd
Attachments
1221 W. Idaho St(83702)
P.O.Box 70
Boise, ID 83707

LISA C. LANCE (ISB No. 6241)
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
Ilance(a-Mdahopower.com
dwalkerCa-)_idahopower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IDAHO POWER COMPANY'S ANNUAL )
COMPLIANCE FILING TO UPDATE THE ) CASE NO. IPC-E-25-33
LOAD AND GAS FORECASTS IN THE )
INCREMENTAL COST INTEGRATED ) IDAHO POWER COMPANY'S
RESOURCE PLAN AVOIDED COST ) REPLY COMMENTS
MODEL. )
COMES NOW, Idaho Power Company ("Idaho Power" or "Company"), and,
pursuant to Idaho Public Utilities Commission's ("Commission") Rules of Procedure 201-
204, hereby respectfully submits the following Reply Comments in response to
Comments filed by Commission Staff ("Staff") filed on December 4, 2025.
I. BACKGROUND
On October 15, 2025, Idaho Power Company submitted its annual compliance
filing to the Idaho Public Utilities Commission in accordance with Order Nos. 32697,
32802, 34794, and 34913. This filing updates the load forecast, natural gas forecast, long-
IDAHO POWER COMPANY'S REPLY COMMENTS - 1

term contract changes, and the Peak Hours and Premium Peak Hours designations used
in the Incremental Cost Integrated Resource Plan ("ICIRP") avoided cost methodology
for determining capacity payments for energy storage qualifying facilities ("QFs"). The
compliance filing also includes a proposal for a new method to calculate Peak Hours and
Premium Peak Hours, which relies primarily on the Loss of Load Probability ("LOLP")
methodology. The Company requested an effective date of January 1, 2026, for these
updates.
On December 4, 2025, Commission Staff filed comments regarding the Company's
proposed updates, ultimately providing five recommendations in response to the
Company's proposal and asking the Commission to adopt the published avoided cost
rates as provided for in Attachments A and B to Staff's Comments. Idaho Power submits
these reply comments in response to Staff's recommendations and observations.
II. REPLY COMMENTS
A. Load Forecast (Recommendation 1)
Staff recommends approval of the Company's proposed load forecast with an
effective date of January 1, 2026. The Company supports Staff's recommendation.
B. Natural Gas Price Forecast (Recommendation 2)
Staff recommends rejecting the Company's proposed natural gas forecast and
approving Staff's forecast with an effective date of January 1, 2026. Staff's forecast relies
on New York Mercantile Exchange ("NYMEX") forward prices for the first three years, a
blended approach in year four, and Platts thereafter. In developing its recommendation,
Staff compared the Company's forecast to the Henry Hub gas price forecasts in Case
Nos. AVU-E-25-13 and PAC-E-25-19, and the NYMEX forward prices as of October 15,
2025. Staff indicated that the Company's gas price forecast is higher than the Henry Hub
IDAHO POWER COMPANY'S REPLY COMMENTS - 2

gas price forecasts provided by other electric utilities in Idaho and NYMEX forward prices,
specifically in the next several years.
The Company believes the purpose of these updates is to ensure the most
accurate and up-to-date reflection of avoided costs while maintaining consistency with
the methodology used in the Company's Integrated Resource Plan ("IRP"). This approach
allows for streamlined updates and ensures that any changes to methodology occur in
the IRP context. The Company's proposal in this case is consistent with the recently filed
2025 IRP and uses the most recent Platts long-term forecast published August 2025. The
Commission previously approved the Company's use of Platts in Order No. 35644 (Case
No. IPC-E-22-26), finding that the Platts forecast was reasonable when compared to other
utilities' forecasts and market fundamentals. In that case, Staff acknowledged that relying
on Platts was reasonable so long as the Company used the most recent forecast and
reflected current market fundamentals. Idaho Power continues to meet those conditions
by using the August 2025 Platts forecast. This precedent demonstrates that Platts can
meet the Commission's standards for reasonableness and alignment with market
conditions.
Idaho Power uses Platts as its source for natural gas forecasting because the
Company has confidence in Platts' expertise in exploration and production dynamics to
produce gas price forecasts for the spot market (including day-ahead and real-time gas
trading). As part of the IRP process, the Company has reviewed and analyzed
approaches used to forecast natural gas prices. During this review, the Company
considered the underlying assumptions in natural gas price forecast methodologies, the
methodologies used by peer utilities, and the feedback received during IRPAC meetings.
IDAHO POWER COMPANY'S REPLY COMMENTS - 3

Based on this exercise, Idaho Power determined Platts to be the most appropriate
because the inputs and techniques used to develop the Platts forecast help ensure
reliability and are based on fundamental market drivers rooted in supply and demand
dynamics. Focusing on fundamental market drivers is critical given recent volatility in
natural gas markets. Platts incorporates real-time market dynamics rather than relying
solely on futures trading prices, which can be influenced by speculative activity and may
not reflect physical market realities. The Platts forecast model's inputs include pipelines,
rate zones and structures, interconnects, capacities, storage areas, and operations
considerations to develop a forecast that solves for a competitive market equilibrium. In
other words, all market fundamentals that contribute to supply and demand are
considered in Platts' robust forecast modeling, which yields a defensible gas forecast'.
Further, Platts forecasts price curves for individual proxy basis hubs, which both aligns
with Idaho Power's trading operations and is consistent with the IRP.
Staff recommends using Intercontinental Exchange's ("ICE") NYMEX pricing, in
part, because it aligns with the forecasts used by other electric utilities in Idaho. While the
Company understands the motivation to encourage consistency across utilities in the
state, Idaho Power does not believe that uniformity should override operational
appropriateness. Idaho Power's generation portfolio and dispatch practices differ
significantly from those of other utilities, making a one-size-fits-all approach inappropriate.
After reviewing Staff's recommendation, the Company continues to support Platts
forecasting over ICE's NYMEX. Platts and ICE are distinctly different. Platts attempts to
reflect the price at which the actual daily physical forward price is expected to settle, while
See Idaho Power Company 2025 Integrated Resource Plan, p. 92-94, available at
https://docs.idahopower.com/pdfs/AboutUs/PlanningForFuture/20251 RP/2025%201 RP%20Final.pdf
IDAHO POWER COMPANY'S REPLY COMMENTS -4

ICE is a futures trading price that allows for risk management or price hedging. Idaho
Power does not price hedge one hundred percent of its gas unit capacity at all times.
Further, Idaho Power hedges the appropriate Northwest gas basis hubs, which trade at
a discount or premium to NYMEX, to align with daily physical gas procurement
operations. Using the ICE NYMEX price curves as the primary forecast does not align
with physical daily gas procurement operations. Also, relying exclusively on today's ICE
NYMEX futures forecasted gas price does not accurately represent the daily physical gas
price exposure the Company is subjected to upon daily settlement. Idaho Power uses gas
fuel exclusively for power generation, not residential and commercial heating, and
dispatch decisions are made on a daily basis to align with the daily settled power markets.
The Company believes its filed natural gas price forecast represents the most
accurate and up-to-date reflection of the Company's avoided cost.
C. Peak and Premium Peak Hours for Energy Storage QFs
(Recommendation 3)
Staff is supportive of the Company's recommendation to rely on the LOLP
methodology but recommends modifications to the Company's proposed Peak and
Premium Peak Hours. Staff explains that the currently approved methodology relied on
subjective comparisons of various data sources, whereas the LOLP methodology is
based on a more objective modeling process using the Company's Reliability and
Capacity Assessment Tool ("RCAT"). The RCAT model calculates the probability of
demand exceeding available generation for every hour throughout the year, and Peak
and Premium Peak Hours are determined based on the highest LOLP values. As noted
in Staff's comments, "Staff believes it is reasonable for the Company to switch to a more
objective and more sophisticated methodology" (Staff/ 7). However, Staff asserts that the
IDAHO POWER COMPANY'S REPLY COMMENTS - 5

Company failed to clearly exclude Sundays and holidays when reporting the timeframes
in the Annual Compliance Filing and therefore recommends that the Commission reject
the Company's Peak and Premium Peak Hours and approve Staff's proposal as shown
in Table No. 2 of Staff's Comments. This is summarized in Staff's comments, "although
Staff believes the [LOLP] method is reasonable, the Company fails to exclude Sundays
and Holidays when reporting the timeframes in the Annual Compliance filing" (Staff/ 6).
The Company is appreciative of Staff's review and notes that Staff identified in
discovery the Company had omitted the necessary language to clarify if the proposed
hours exclude Sundays and holidays from the identified Peak and Premium Peak Hours,
which was confirmed by the Company. Accordingly, there is no substantive difference
between the Company's intended proposal and Staff's recommendation on this point.
Finally, the Company appreciates Staff's analysis of how the proposed Peak and
Premium Peak Hours should apply in the ICIRP model and agrees that meeting with Staff
to work through the application of Peak and Premium Peak Hours to any new, ICIRIP-
based energy storage QF contract negotiations would be beneficial.
D. Updating SAR Model and Published Rates (Recommendations 4 and
5)
Staff recommends that the Commission approve updates to the SAR model and
associated published avoided cost rates. These updates incorporate the recently
approved first capacity deficiency date of June 2027 and provide seasonal avoided cost
calculations for energy storage QFs. Staff requests that the Company verify the updated
SAR model and published rates.
The Company agrees with Staff's updates to the SAR model and finds the
published avoided cost rates reasonable and consistent with Commission orders, with the
IDAHO POWER COMPANY'S REPLY COMMENTS - 6

Company proposing one modification to the model to improve transparency and ease of
review. Specifically, Idaho Power recommends adding the split between summer and
winter risk to the input list in the "Avoid New" tab rather than hard-coding these values as
they currently appear, and likewise adjusting Column D in Staff's new
"IPCOStorage(Winter Capacity)" and "IPCOStorage(SummerCapacity)" tabs to use a
formula that references the summer and winter risk percentages in the input list. This
adjustment will make the model more user-friendly and ensure that seasonal risk
assumptions are clearly visible and easily auditable. Idaho Power will provide a copy of
the SAR model reflecting this proposed change as "Attachment 1" alongside this filing.
III. CONCLUSION
Idaho Power acknowledges and appreciates Staff's review of the Company's
application and respectfully requests the Commission approve the Company's application
as filed with the clarification to the applicability of the Peak and Premium Peak hours
discussed above. The Company also requests that the Commission approve Staff's SAR
model, which incorporates a June 2027 deficiency date and seasonal avoided cost
calculations for energy storage QFs, including the Company's proposed modification, and
the associated published avoided cost rates.
Respectfully submitted this 11th day of December 2025.
LISA C. LANCE
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S REPLY COMMENTS - 7

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 11t" day of December 2025, 1 served a true and
correct copy of the within and foregoing IDAHO POWER COMPANY'S REPLY
COMMENTS upon the following named parties by the method indicated below, and
addressed to the following:
Adam Triplett Hand Delivered
Deputy Attorneys General U.S. Mail
Idaho Public Utilities Commission Overnight Mail
P.O. Box 83720 FAX
Boise, ID 83720-0074 X Email - adam.triplett(a).puc.idaho.gov
okba--
Christy Davenport, Legal Assistant
IDAHO POWER COMPANY'S REPLY COMMENTS - 8