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HomeMy WebLinkAbout20251224Application.pdf 0-10AM POWER. RECEIVED DECEMBER 24, 2025 LISA C. LANCE IDAHO PUBLIC Corporate Counsel UTILITIES COMMISSION Ilance(a idahopower.com December 24, 2025 VIA ELECTRONIC FILING Commission Secretary Idaho Public Utilities Commission 11331 W. Chinden Blvd., Bldg 8, Suite 201-A (83714) PO Box 83720 Boise, Idaho 83720-0074 Re: Case No. IPC-E-25-35 Application of Idaho Power Company's Compliance with Order Nos. 34031 and 35816 for a Prudence Determination of Hells Canyon Complex Relicensing Costs from January 1, 2016 through December 31, 2025 Dear Commission Secretary: Attached for electronic filing is Idaho Power Company's ("Idaho Power") Application, the Direct Testimony of Jessica G. Brady and the Direct Testimony of Brett Dumas in the above matter. If you have any questions about any of the aforementioned documents, please do not hesitate to contact me. Very truly yours, /,, Gl� Lisa C. Lance LCL:sg Attachments 1221 W. Idaho St(83702) P.O. Box 70 Boise, ID 83707 LISA LANCE (ISB No. 6241) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-2664 Facsimile: (208) 388-6935 Ilance(o)_idahopower.com Attorney for Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION ) OF IDAHO POWER COMPANY'S ) CASE NO. IPC-E-25-35 COMPLIANCE WITH ORDER NOS. 34031 ) AND 35816 FOR A PRUDENCE ) APPLICATION DETERMINATION OF HELLS CANYON ) COMPLEX RELICENSING COSTS FROM ) JANUARY 1 , 2016, THROUGH ) DECEMBER 31 , 2025. ) Idaho Power Company ("Idaho Power" or "Company"), in accordance with Idaho Code § 61-502 and Commission Rule of Procedure' 52, hereby respectfully makes application to the Idaho Public Utilities Commission ("Commission") for an order designating Idaho Power's expenditures from January 1, 2016, through December 31, 2025, in Hells Canyon Complex ("HCC") relicensing costs as prudently incurred and eligible for inclusion in customer rates at a later date. The Company's filing includes all ' Hereinafter cited as RP. APPLICATION - 1 costs recorded through September 30, 2025. The Company will submit a supplemental application in early 2026 that includes expenditures incurred through year-end 2025. Exhibit 1 to the testimony of Company Witness Brett Dumas presents HCC relicensing costs summarized by project, while Attachment 1 to this Application provides a separate presentation of HCC relicensing expenditures by cost element. Idaho Power will supplement both the exhibit and the attachment to reflect costs incurred through year- end 2025. The Company is not requesting an adjustment to customer rates at this time. In support of this Application, Idaho Power states the following: I. THE HELLS CANYON COMPLEX 1. The Hells Canyon Complex consists of three hydroelectric developments, Brownlee, Oxbow, and Hells Canyon, located on the Snake River at the Idaho-Oregon border. It represents approximately 1,276 megawatts of nameplate generation capacity or about 24 percent of the Company's total generating capacity. As the Company's largest hydroelectric resource, the HCC plays a vital role in delivering reliable, affordable, and clean energy to customers. 2. Idaho Power is required to obtain a license from the Federal Energy Regulatory Commission ("FERC") to operate the HCC. The licensing process includes extensive public review and involves numerous resources and environmental agencies. Idaho Power's previous long-term license was set to expire on July 31, 2005. In anticipation of that expiration, the Company began its relicensing efforts in 1991 to prepare for the filing of a new license application, which ultimately occurred in July 2003. Because the Company's relicensing application is still pending, Idaho Power has been operating under annual licenses issued by FERC since July of 2005 as the Company and APPLICATION - 2 stakeholders work through outstanding issues associated with the pending license application. Although Idaho Power is unable to predict with certainty the timing of the issuance of a new license for the HCC, the Company estimates issuance of the license will occur no earlier than 2027. II. REGULATORY HISTORY 3. In Case No. IPC-E-16-32, Idaho Power applied to the Commission to deem prudent and eligible for future inclusion in rates HCC relicensing costs incurred through December 31, 2015. The Company sought this pudency review outside of a general rate case to allow for a more focused review of the relicensing costs, given the large volume of transaction data, the multi-decade span of the project, and the impending retirement of key employees with direct knowledge of relicensing activities. Ultimately, in Order No. 34031 , the Commission approved the Settlement Stipulation filed by Idaho Power, Commission Staff, and Idaho Irrigation Pumpers Association, collectively referred to as the Signing Parties. Under the Settlement Stipulation, the Signing Parties agreed to accept HCC relicensing expenditures incurred through December 31 , 2015, totaling approximately $213.6 million. The Signing Parties also agreed to a number of compliance obligations, including requirements for improving the Company's document retention policy and updated guidelines for annual reporting of HCC relicensing expenditures. 4. In April 2023, in Case No. IPC-23-13, Idaho Power petitioned the Commission to modify the timing of the requirement approved by Order No. 34031. The Company sought to file a request for prudence determination within 12 months of receiving the final license, or in the event a final license is not received by year-end 2025, APPLICATION - 3 to file in early 2026 for prudence of expenditures incurred through year-end 2025. The Commission granted the Company's request in Order No. 35816. III. PRUDENCE REQUEST 5. As explained in the direct testimony of Jessica G. Brady, in compliance with Order Nos. 34031 and 35816, Idaho Power is requesting a prudence determination on approximately $305 million of HCC relicensing costs incurred through Q3 2025, of which approximately$258 million is classified as Allowance for Funds Used During Construction ("AFUDC"). The Company is initiating this proceeding before all year-end 2025 data is available to provide the Commission Staff sufficient time to review the record and conduct discovery related to relicensing activities prior to the spring 2026 retirement of the Company's Environmental Affairs Director, who has historical and technical knowledge relevant to this case. The Company will supplement this Application with year-end 2025 data in early 2026. IV. HCC RELICENSING EFFORTS 6. Idaho Power's relicensing efforts over the last ten years have focused on advancing key regulatory requirements that must be met prior to FERC issuing a new long-term license: Clean Water Act Section 401 water quality certifications from Idaho and Oregon, formal consultation under Section 7 of the Endangered Species Act ("ESA"), and FERC's review under the National Environmental Policy Act ("NEPA"). Clean Water Act ("CWA") Section 401 Certification 7. To obtain Clean Water Act ("CWA") Section 401 certifications, Idaho Power undertook a multi-year process beginning in 2003 that included annual application updates, technical studies, and the development of mitigation measures to address key APPLICATION - 4 water quality concerns. These concerns included elevated Snake River temperatures affecting fall Chinook salmon and methyl mercury concentrations in fish. In 2016, conflicts arose between the Idaho and Oregon certification processes. Oregon's draft certification included requirements for fish passage and reintroduction, while Idaho's certification prohibited actions that would reintroduce fish species into Idaho waters without state approval. These conflicts were ultimately resolved in April 2019 through a settlement agreement among Idaho Power, the State of Idaho, and the State of Oregon. 8. The CWA Section 401 certifications require Idaho Power to implement a comprehensive Temperature Management and Compliance Plan. This plan includes watershed scale restoration efforts through the Snake River Stewardship Program, operational temperature management at the dams, and measures addressing dissolved oxygen, total dissolved gas, nutrients, and mercury. The primary costs associated with these requirements include technical studies, monitoring, and habitat restoration projects such as the Bayha Island Project and the Grand View Project, as well as the development of a methyl mercury management plan. ESA Consultation 9. In support of consultation under Section 7 of ESA, Idaho Power coordinated with the United States Fish and Wildlife Service and the National Marine Fisheries Service to address the primary species of concern, including bull trout, fall Chinook salmon, and steelhead. This coordination included the preparation of biological assessments in 2020 and 2025 and the development of mitigation measures. Key issues identified during the consultation process included water quality, habitat availability, sediment and spawning gravel conditions, juvenile entrapment, and potential methyl APPLICATION - 5 mercury effects. The Company implemented comprehensive monitoring and research programs, including long term assessments of fish populations, sediment transport, spawning success, and habitat conditions, to inform operational and restoration measures. The associated costs, which continue until the issuance of biological opinions, include monitoring, data collection, habitat assessments, and reporting, NEPA Analysis 10. In support of FERC's environmental review under NEPA, Idaho Power implemented targeted conservation and research programs to inform the preparation of the Environmental Impact Statement ("EIS") for the HCC. These efforts included updating the 2003 license application, incorporating the CWA Section 401 certification settlement, and providing data to support evaluation of operational impacts and mitigation measures. A key component of this work was the Cultural Resources Program, which identifies, documents, and protects archaeological sites, historic structures, and culturally significant areas along the Snake River, including sites associated with Native American use and other historical activities. Idaho Power conducted surveys and ongoing monitoring of nearly 1,000 potentially significant cultural sites and coordinated with tribes and regulatory agencies to ensure that impacts were properly identified, evaluated, and addressed. Other Relicensing Activities 11. In support of the Federal Power Act Section 4(e) requirements, Idaho Power worked with the United States Forest Service to establish mandatory license conditions for portions of the HCC located on National Forest System lands. In October 2024, the Company filed a settlement with FERC that established mutually agreed-upon operational and recreational measures, including sand augmentation within the Hells Canyon APPLICATION - 6 National Recreation Area. Idaho Power's sediment monitoring program provided critical data that informed these negotiations and helped limit the scope and cost of additional measures. V. MODIFIED PROCEDURE 12. Idaho Power believes that a technical hearing is not necessary to consider the issues presented herein and respectfully requests that this Application be processed under Modified Procedure, i.e., by written submissions rather than by hearing. RP 201, et seq. If, however, the Commission determines that a technical hearing is required, the Company stands ready to present its testimony, including but limited to the Brady Testimony filed contemporaneously herewith, and support the Application in such hearing. VI. COMMUNICATIONS AND SERVICE OF PLEADINGS 13. Communications and service of pleadings with reference to this Application should be sent to the following: Lisa Lance Connie Aschenbrenner Regulatory Dockets Jessi Brady Idaho Power Company Idaho Power Company 1221 West Idaho Street (83702) 1221 West Idaho Street (83702) P.O. Box 70 P.O. Box 70 Boise, Idaho 83707 Boise, Idaho 83707 (lance(@idahopower.com caschenbrenner(a-).idahopower.com docketsCc)_idahopower.com jbradyCc)-idahopower.com VII. REQUEST FOR RELIEF 14. Idaho Power respectfully requests that the Commission issue an order designating Idaho Power's HCC relicensing expenditures from January 1 , 2016 to December 31, 2025, as prudently incurred. APPLICATION - 7 DATED at Boise, Idaho, this 24t" day of December 2025. /V, G10A� LISA C. LANCE Attorney for Idaho Power Company APPLICATION - 8 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-25-35 IDAHO POWER COMPANY ATTACHMENT NO. 1 RELICENSING EXPENDITURES BY PROJECT HCC RELICENSING EXPENDITURES(000's) 1997-2025 September YTD 2025 Cost Element 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 12LM Total IPCO Labor 1,467 2,218 2,808 3,258 3,461 3,724 3,586 2,351 1,867 1,947 1,559 1,510 1,727 1,723 1,636 1,682 1,792 1,846 2,071 2,385 2,413 2,275 2,309 2,119 1,900 1,691 2,044 1,437 792 61,598 Materials 56 142 267 272 129 111 175 163 232 165 147 132 60 119 35 43 80 45 76 391 107 68 137 87 49 31 47 19 7 3,395 Purchased Services 1,016 2,209 3,610 4,663 3,512 2,659 2,825 3,151 3,036 3,541 2,549 1,878 1,825 1,523 1,890 2,537 3,087 2,729 3,037 6,783 4,208 3,095 2,947 2,775 2,417 1,668 1,420 540 218 77,346 Accounting Entries - - - 137 160 114 137 137 137 137 137 137 137 137 137 137 137 137 137 133 137 137 137 137 137 236 236 386 298 4,173 General Overheads - 142 191 11 (6) 0 - 0 1 2 1 - - - - - - - - - - - - - - - - - 343 Other Expenses 360 548 783 604 295 452 352 533 260 (79) 247 214 216 159 148 191 228 204 718 54 (4,796) 1,082 505 290 250 185 299 277 120 4,697 Subtotal 2,898 5,259 7,659 8,945 7,551 7,061 7,075 6,335 5,534 5,713 4,639 3,872 3,966 3,662 3,847 4,592 5,324 4,962 6,040 9,746 2,069 6,656 6,035 5,409 4,754 3,810 4,046 2,660 1,435 151,552 AFUDC - - 948 1,584 1,038 1,695 3,695 3,686 4,365 4,758 5,497 5,376 7,785 9,437 10,804 11,764 12,976 14,535 15,854 18,373 17,375 21,374 23,624 25,313 27,685 30,016 32,597 34,503 27,571 374,228 Grand Total 2,898 5,259 8,607 10,530 8,589 8,756 10,770 10,022 9,898 10,472 10,137 9,248 11,751 13,099 14,651 16,356 18,300 19,496 21,893 28,119 19,443 28,030 29,659 30,722 32,439 33,826 36,643 37,163 29,006 525,780 1.Idaho Power is authorized to recover a portion of the AFUDC on HCC relicensing expenditures.As of September 30,2025,the Company had recorded a regulatory liability of$269 million for collection of AFUDC on HCC relicensing expenditures.