20251224Motion for Oral Argument - Redacted.pdf

RECEIVED
DECEMBER 24, 2025
IDAHO PUBLIC
UTILITIES COMMISSION
C. Tom Arkoosh, ISB No. 2253
Nicholas J. Erekson, ISB No. 9325
ARKOOSH LAW OFFICES
913 W. River Street, Suite 450
P.O. Box 2900
Boise, ID 83701
Telephone: [phone]
Facsimile: [phone]
Email: tom.arkoosh&arkoosh.com
nick.erekson(d),akoosh.com
Admin copy: erin.cecil(d),arkoosh.com
Attorneys for IdaHydro
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) Case No. IPC-E-25-22
OF IDAHO POWER COMPANY FOR )
AUTHORITY TO UPDATE ITS ) IDAHYDRO'S MOTION FOR ORAL
OPERATION AND MAINTENANCE ) ARGUMENT
CHARGES APPLICABLE TO SCHEDULE )
72, GENERATOR INTERCONNECTIONS )
TO PURPA QUALIFYING FACILITY )
SELLERS. )
COMES NOW the Idaho Hydroelectric Power Producers Trust, an Idaho Trust, d/b/a
IdaHydro ("IdaHydro"), by and through its counsel of record, C. Tom Arkoosh and Nicholas J.
Erekson of Arkoosh Law Offices, and hereby submits the following motion for oral argument.
This matter proceeds on a modified procedure contrary to multiple requests for hearing
lodged by IdaHydro to address IdaHydro's concerns that issues would be overlooked in the
abbreviated nature of a modified procedure. The overlooked issues, and not addressed by Idaho
Power Company's ("Idaho Power") comments in this matter, are (1) Idaho Power's burden of
proof in charging expenses; and (2) the Federal Energy Regulatory Commission's ("FERC")
allowance for Idaho Power to charge operation and maintenance ("O&M") on Public Utility
Regulatory Practices Act("PURPA")interconnections in excess of the corresponding costs which
the electric utility would have incurred if it had not engaged in interconnected operations.
To establish that the O&M charges to PURPA facilities are fair, just, and reasonable,
leaving the ratepayer indifferent, Idaho Power bears the burden of proof.
Under the traditional approach, it is unquestioned that the utility has the initial
burden of showing prima facie the reasonableness of its operating expenses. Boise
Water Corp. v. Idaho Public Utilities Commission, 97 Idaho 832, 555 P.2d 163
IDAHYDRO'S MOTION FOR ORAL ARGUMENT—Page 1

(1976). In the case of payments to an affiliate, moreover, unlike in the case of
payments to a non-affiliate, a mere showing of actual incurrence of the expense
does not establish a prima facie case of reasonableness. Id. at 836-38, 555 P.2d at
167-69.
Wash. Water Power Co. v. Idaho Pub. Utils. Comm'n, 101 Idaho 567, 576, 617 P.2d 1242, 1251
(1980).
Thus, it is not enough for Idaho Power to show that Idaho Power generally books what it
charges itself for O&M, but it must show the charges are reasonable. The only way that seems
possible, at least as a starting place, is to show the actual cost.' Under Schedule 72, which Idaho
Power does not wish to materially change, Idaho Power charged amounts totaling
than a new replacement over a■-year period on facilities with a 36-year useful life. (Sloan Dep.
32:9-34:23). It begs credulity. A.W. Brown points out this anomaly in the initial Case No. IPC-E-
90-20 in 1991, Attachment 1, and was correct then as it is now.
Indeed, this precise outcome was foreseen more than three decades ago. In that initial
proceeding establishing Schedule 72, A.W. Brown identified the structural flaw inherent in using
cost proxies divorced from actual maintenance expense. (Id.)Mr. Brown warned that the Schedule
would inevitably produce chronic over-recovery, allowing Idaho Power to collect O&M charges
at a rate untethered from actual maintenance costs. Time has proven that concern not merely well-
founded, but prophetic.
At the proposed 0.9%monthly rate,the Schedule guarantees that O&M charges will exceed
the cost of completely replacing the new system approximately every 9.25 years,2 less than one-
third of the facilities' useful life. That result is not an accident; it is the predictable consequence of
a rate design flaw identified in 1991 and left uncorrected.
The issue of FERC's requirement that recoverable O&M be limited to costs incurred in
excess of what the utility would have otherwise incurred if it had not engaged in interconnected
operations is not addressed by Idaho Power at all. Federal regulations defining "interconnection
costs" and related maintenance costs are explicit: a qualifying facility may be charged only those
incremental costs caused by interconnection,not costs the utility would have borne in the ordinary
course of serving its own load.Yet Idaho Power offers no evidence or even analysis demonstrating
1 Showing actual costs may not be enough. In the above-cited Washington Water Power case, the Supreme Court
concluded more was necessary.
2 A monthly O&M charge of 0.9%equates to an annual charge of approximately 10.8%(0.9% x 12).At that rate,
cumulative charges equal 100%of replacement cost in approximately 9.25 years(100%- 10.8%z 9.25).
IDAHYDRO'S MOTION FOR ORAL ARGUMENT—Page 2

that the O&M charges imposed under Schedule 72 reflect costs above and beyond baseline utility
operations. Again, the only means to commence that discussion is to know the actual costs.
As Brown explained more than 30 years ago, the threshold question is not whether Idaho
Power incurs some costs associated with interconnection,but whether those costs exceed what the
ratepayer would have paid had the utility interconnected its own equivalent capacity. Answering
that question requires identification and quantification of actual costs on both sides of the ledger.
Without that comparison, the FERC standard cannot be satisfied. Until actual costs are known, it
is impossible to determine whether any portion of the O&M charges imposed under Schedule 72
is lawful under PURPA and FERC's implementing regulations.
Finally, Idaho Power maintains that it is too burdensome and expensive to keep granular
records. If there are excess costs in maintaining such records,those are the expense of the PURPA
facility, not a ratepayer burden. It should be noted that when Idaho Power builds interconnections,
sets poles for or hooks up private residences, the costs are presented to the penny.
CONCLUSION
For the foregoing reasons, IdaHydro seeks oral argument before the Commission to flesh
out the above issues for the benefit of the Commission's decision-making process. The issues
raised are neither peripheral nor academic; they go to the core of Idaho Power's burden of proof
and compliance with governing federal law. Proceeding solely on a modified procedure risks
leaving unresolved fundamental questions regarding whether Idaho Power has met its obligation
to demonstrate that its O&M charges to PURPA facilities are fair,just, reasonable, and ratepayer-
neutral, and whether those charges comply with FERC's requirement that recoverable costs be
limited to those in excess of what the utility would have otherwise incurred absent interconnection.
The modified procedure is ill-suited to resolve the deficiencies in Idaho Power's request.
Without an additional hearing, the Commission is left to infer reasonableness where the law
requires proof, and to overlook threshold legal constraints imposed by precedent and federal
regulation alike. A hearing will permit focused examination of Idaho Power's burden of proof, its
failure to reconcile Schedule 72 charges with actual costs or useful life, and its nonresponse to the
FERC excess-cost requirement. It will also allow the Commission to test Idaho Power's claim that
cost tracking is too burdensome, a claim that is difficult to square with its ability to account for
costs down to the penny in every other context.
IDAHYDRO'S MOTION FOR ORAL ARGUMENT—Page 3

The Commission should not ratify a decades-old charging practice by default, nor permit
cost recovery untethered from evidence simply because scrutiny is inconvenient. Therefore,
IdaHydro respectfully requests that the Commission grant its request for oral argument and allow
these issues to be fully and transparently addressed before a final decision is rendered.
DATED this 241h day of December 2025.
ARKOOSH LAW OFFICES
C. Tom Arkoosh
Attorney for IdaHydro
IDAHYDRO'S MOTION FOR ORAL ARGUMENT—Page 4

CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 24t' day of December 2025, 1 served a true and correct
copy of the foregoing document(s)upon the following person(s), in the manner indicated:
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Boise, ID 83720-0074
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IDAHYDRO'S MOTION FOR ORAL ARGUMENT—Page 5

RENEWABLE ENERGY U.S. Mail, Postage Prepaid
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Portland, OR 97214
C. Tom Arkoosh
IDAHYDRO'S MOTION FOR ORAL ARGUMENT—Page 6

ATTACHMENT 1
ATTACHMENT 1

C. TOM ARKOOSH tt rE c P_}Y` J
RODEN & ARKOOSH -if
Attorneys at Law Ell
802 West Bannock, Suite 900 vl � l� ��� 5
P.O. Box 2110
Boise, Idaho 83701
Telephone: [phone] �r`oU i`liuu�
l u
ATTORNEYS FOR PROTESTANT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) Case No. IPC-E-90-20
OF IDAHO POWER COMPANY FOR )
APPROVAL OF AN INTERCONNECTION ) PETITION FOR
TARIFF FOR NON-UTILITY ) RECONSIDERATION
GENERATION - SCHEDULE 72 )
Comes now the protestant in the above entitled action, A. W.
Brown, Inc. , a California corporation qualified to do business in
the State of Idaho [Brown] , by and through his counsel of record,
C. Tom Arkoosh of the firm of Roden & Arkoosh, Boise, Idaho, and
herein respectfully petitions the Idaho Public Utilities Commission
[Commission] for reconsideration of its Order No. 23631, entered in
the above matter, based upon the fol-lowing showing:
1. The Commission found in said order that,
Previously, the terms and conditions for interconnection
of non-utility generation to the Company's
transmission/distribution system have been individually
negotiated, although the terms and conditions have proved
to be substantially similar.
This finding directly conflicts with the previous findings of
the Commission. Indeed, this finding conflicts with the practice
of the Idaho Power Company requiring the payment of the
interconnection costs at Idaho Power prices before it will allow
PETITION FOR RECONSIDERATION -1-

interconnection, and the Commission' s rulings which sanctify this
practice. For example, in Order No. 19442 , Case No. U-1006-237 ,
the Commission addressed these issues:
3 . The "Remote Disconnection" Issue. May Idaho
Power install remote disconnection equipment
at the Arkooshes ' cost?
4 . The "Interconnection Cost" Issue. What
expense may Idaho Power charge the Arkooshes
for interconnecting the Geo-Bon #2 project to
Idaho Power 's line?
The Commission addressed both these issues, and concluded that
Idaho Power could charge a developer its costs plus . 7% monthly
maintenance. In reaching this conclusion, the Commission rejected
the developers argument that the federal regulations allow a charge
for interconnection only in excess of what the rate-payer would pay
if the utility interconnected its own new capacity. This identical
argument was made by Brown in the pending matter, and also
rejected. In Order No. 19442, the Commission accepted that the
federal regulations defined "interconnection costs" as the cost
over and above what the utility would pay for interconnection of
its own capacity, but presumed that those costs were included in
the avoided costs calculation:
Idaho Power ' s remote disconnection (and other
interconnection) costs for additional generation purchase
are presumable already in place; if they are not, nothing
in the record quantifies them for comparison.
Order No. 19442 , page 11.
In the present case, the Commission has glossed over that the
federal regulations define "interconnection costs" as only the
costs of interconnection over and above the costs that the
PETITION FOR RECONSIDERATION -2-

ratepayer would ordinarily pay for the new capacity. The
Commission then acknowledges that, in any event, "IPCo points out
that the avoided cost rates paid to qualifying facilities (QFs)
allow for the recovery of interconnection costs by the QF. " The
signatory of this brief has reviewed the pre-filed testimony of the
joint utility panel in Case No. U-1500-170, setting forth the
capital cost of plant used to calculate the avoided costs using the
surrogate avoidable resource methods (SAR) , and does not perceive
that the interconnection costs, line rebuild costs, and the like
which are charged to QF's are in fact included in the avoided
costs. Instead, they appear not to be included in avoided costs.
Because the U-1500-170 case is the only record available on this
question, the Commission should have made a determination of the
numerical value of the "interconnection costs" as the same are
defined in the regulations, and determined whether indeed it cost
the ratepayer more to interconnect a QF than it would for the
utility to interconnect equivalent capacity. It is respectfully
submitted, given the overcharges pointed out by Brown in his
protest that the cost of interconnecting utility capacity is much
higher than the cost of interconnecting QF capacity. Thus, a
developer should be required to pay nothing for interconnection,
and it would be a bargain for the ratepayer.
2 . The Commission avoided the question of whether Idaho Power
is overcharging on its interconnection costs by noting,
"Competitive third party pricing and construction is not precluded
under Schedule 72 . " If this were correct, it would appear to solve
PETITION FOR RECONSIDERATION -3-

this problem in the future. Schedule 72 provides, however,
The Company will construct, own, operate and
maintain all Disconnection Equipment, Metering Equipment,
and Upgrades and Relocation.
These are the very items about which Brown complains that
Idaho Power imposes exorbitant overcharges. Brown points out in
his protest that these items are simple, available on the market
much cheaper than from Idaho Power, and, in some instances, better
suited to the project than the items Idaho Power provides .
3 . The Commission rejected Brown' s protest to the . 7%
maintenance charges imposed by [not negotiated with] Idaho Power on
the interconnection costs. He points out that he has already, in
36 months, paid $4, 805. 28 to maintain $4500 worth of equipment.
Even accepting Idaho Power' s contention that the value of the
interconnection equipment sold to Brown is $19 , 000, he will have
paid its full value for mere maintenance in 12 years at the rate of
$133 . 48 per month. Using a realist future value analysis, and
accruing the maintenance money at, for instance, 10% interest,
Brown re-pays Idaho Power for this equipment every 94 . 5 months, or
7 . 8 years. Over the life of a 35 year contract, Brown will have
paid to replace the interconnection equipment 5 and 1/2 times ---
once originally and 4 and 1/2 times to Idaho Power. The Commission
need only contemplate whether the O & M on small hydro projects are
projected to be this high to conclude that . 7% O & M charge does
not accurately or reasonably reflect actual costs based upon actual
experience.
PETITION FOR RECONSIDERATION -4-

CONCLUSION
The Commission is herein respectfully requested to conduct a
hearing and take evidence regarding its findings concerning
Schedule 72 ; or, alternatively, hold this matter in abeyance until
the hearing in Case No. IPC-E-91-2, concerning these identical
issues. It is apparent from the face of the findings which support
the Order under consideration that the facts relied upon are
inaccurate, and should be reconsidered by the Commission.
DATED this day of April, 1991.
C. TOM ARKOOSH
CERTIFICATE OF MAILING
I hereby certify that on the i day of April, 1991, I
served a true and correct copy of the foregoing document upon the
following persons, by causing to be deposited a copy thereof in the
United States Mail, first class postage prepaid:
BARTON L. KLINE
Attorney at Law
P.O. Box 959
Boise, Idaho 83701
SCOTT WOODBURY
Idaho Public Utilities Commission
Statehouse
Boise, Idaho 83720
PETER J. RICHARDSON
DAVIS WRIGHT TREMAINE
350 North 9th Street, Suite 400
Boise, Idaho 83702
C. TOM ARKOOSH
PETITION FOR RECONSIDERATION -5-