20251229Amended_and_Restated_Order_No_36881.pdf

Office of the Secretary
Service Date
December 29,2025
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER ) CASE NO. IPC-E-25-10
COMPANY'S APPLICATION FOR )
APPROVAL OF A POWER PURCHASE ) AMENDED AND RESTATED
AGREEMENT AND ENERGY STORAGE ) ORDER NO. 36881
AGREEMENT WITH CRIMSON ORCHARD )
SOLAR LLC )
On March 13, 2025, Idaho Power Company ("Company") applied to the Idaho Public
Utilities Commission ("Commission") for an order: (1) approving the 20-year Power Purchase
Agreement ("PPA") between Crimson Orchard Solar LLC ("Crimson Orchard") and the
Company, supplying the 100 megawatts ("MW") output to the Company; (2) approving the 20-
year Energy Storage Agreement ("ESA") between Crimson Orchard and the Company for 100
MW of dispatchable energy storage capacity; and (3) acknowledgment of the lease accounting
necessary to facilitate the transaction and that the resulting expenses associated with both the PPA
and the ESA are prudently incurred for ratemaking purposes ("Application").
On April 25,2025,the Commission issued a Notice of Application and Notice of Modified
Procedure, establishing an August 1, 2025, deadline for public and Commission Staff("Staff')
comments, and an August 22, 2025, deadline for the Company to file reply Comments. Order No.
36577. The Commission granted intervention to Idaho Irrigation Pumpers Association, Inc.
("IIPA") and Micron Technology, Inc. ("Micron"). Order Nos. 36538 and 36598.
On August 15, 2025, the Company filed a Supplemental Application, providing an
Amendment to the PPA and ESA proposed in the Application. On August 22, 2025, the
Commission issued an Order vacating the public comment and reply comment deadlines. Order
No. 36736. On September 8, 2025, the Commission issued Order No. 36755 resetting the public
comment and reply comment deadlines.
Comments and supplemental comments were filed by Staff and IIPA. Reply comments
were filed by the Company.
On October 31, 2025, IIPA petitioned for $10,420.25 in intervenor funding, pursuant to
Idaho Code § 61-617A and Commission Rules of Procedure ("IDAPA") 31.01.01.161 through
.165.
AMENDED AND RESTATED
ORDER NO. 36881 1

Having reviewed the record, the Commission issues this Order (1) approving the 20-year
PPA between Crimson Orchard and the Company; (2) approving the 20-year ESA between
Crimson Orchard and the Company;(3)acknowledging the lease accounting necessary to facilitate
the transaction; (4) acknowledging that the resulting expenses associated with both the PPA and
the ESA are prudently incurred for ratemaking purposes with the exception of the Purchase Option
provisions; (5) approving the PPA Amendment; (6) approving the ESA Amendment; (7)
establishing a soft cap on the future cost recovery of certain expenses; and (7) approving IIPA's
Application for intervenor funding.
THE APPLICATION
The Company's Application requested an order: (1) approving the 20-year PPA between
Crimson Orchard and the Company, supplying the 100 MW output to the Company; (2) approving
the 20-year ESA between Crimson Orchard and the Company for 100 MW of dispatchable energy
storage capacity; and (3) acknowledgment of the lease accounting necessary to facilitate the
transaction and that the resulting expenses associated with both the PPA and the ESA are prudently
incurred for ratemaking purposes. Application at 1-2.
The Company submitted two sets of direct testimony with its Application. Id. at 2. The
testimony outlined the Company's need for new resources to address a forecasted capacity deficit
in 2027, as identified through prior Integrated Resource Plans ("IRP"). Id. The Company noted
that the 2021 IRP projected annual capacity deficits of approximately 101 MW in 2023, 186 MW
in 2024, 311 MW in 2025, 560 MW in 2026, and 665 MW in 2027. Id.
The Company stated that the 2027 capacity deficit outlined in the 2021 and 2023 IRPs led
to the decision to solicit project proposals. Id. The Company explained that the bid evaluation
process for project proposals submitted under the 2026 Request for Proposals ("RFP") had been
structured to identify resources that would deliver the greatest customer benefits while ensuring
the Company could meet its projected energy and capacity requirements, including the anticipated
2027 capacity shortfall.Id. at 6.
The Company indicated that,pursuant to the PPA, Crimson Orchard would develop, own,
operate, and maintain a solar generation facility in Elmore County, Idaho, with an expected
capacity of 100 MW. Id. at 6. The facility would provide power to the Company over a 20-year
term beginning on June 1, 2027, the commercial operation date. Id. at 6-7. Additionally, the
Company reported that a 20-year ESA had been executed for a battery storage system,also located
AMENDED AND RESTATED
ORDER NO. 36881 2

in Elmore County, Idaho, capable of delivering 100 MW of capacity at the interconnection point
on the Company's system collectively, ("Crimson Orchard Project"). Id. at 7.
The Company stated that the Crimson Orchard PPA and ESA were executed on February
7,2025, as a cost-effective project capable of achieving commercial operation by June 1, 2027. Id.
at 6.
The Company requested that the Commission recognize the lease accounting treatment in
accordance with Generally Accepted Accounting Principles to facilitate the ESA transaction and
affirm that the related ESA costs were prudently incurred and appropriate for ratemaking purposes.
Id. at 8-9.
THE SUPPLEMENTAL APPLICATION
The Company's Supplemental Application requested that the Commission approve the
First Amendments to the PPA and ESA, both executed on August 13, 2025. Supplemental
Application at 2.
The Company believed that deficits on its system as well as the lack of other viable options
continued to support the Crimson Orchard Project, including the First Amendments to the PPA
and ESA, claiming that they are still the least-cost, least risk ("LC-LR") resource needed for the
Company to meet its obligations to customers. Id. at 6. The Company stated that the First
Amendments were conceptually the same but featured unique provisions relative to the PPA and
ESA. Id. at 7. The Company stated that the First Amendments to the PPA and ESA also included
language recommended by Staff in its comments on the Application regarding the requirement of
Commission approval and language regarding equal employment opportunity law.Id.
The Company reaffirmed its declaration that the Crimson Orchard Project was selected in
compliance with the Commission's directive to adhere to the Oregon competitive procurement
process for the acquisition of LC-LR new generation resources. Id. at 10. The Company provided
a list of other viable shortlist projects from the 2026-2027 REP which have been reviewed by Staff
and reiterated that the Crimson Orchard Project is a necessary resource that could be brought online
in time to meet the 2027 capacity deficit. Id. at 10-11.
STAFF COMMENTS
Staff agreed that the Company's system faces a capacity deficit in 2027 and the Crimson
Orchard Project resources are LC-LR. Staff Comments at 2. Staff recommended that the
Commission approve the Company's requests, with minor modifications.Id.
AMENDED AND RESTATED
ORDER NO. 36881 3

Staff evaluated the Company's load and resource assumptions and believed them to be
reasonable. Id. at 3. Using these assumptions, Staff also reviewed the Company's reliability
analysis and concurred with its findings. Id. Staff agreed that the system would experience a 123
MW capacity shortfall in 2027 without the addition of new resources. Id.
Staff stated that it identified concerns with the competitive acquisition process in Case No.
IPC-E-24-46 but believed that the concerns were moot in this instance because the Crimson
Orchard Project resources were the only remaining resources that could be constructed by the 2027
deadline. Id. Staff observed that this proceeding perpetuated the recurring challenge faced by the
Commission of having to choose between approving a last-resort project or risking a system
capacity shortfall. Id. To enable more viable resource alternatives, Staff recommended that the
Company shorten the time required to procure new resources once a need is identified, extend its
planning horizon to allow for earlier preparation, and/or mitigate load growth through reduction
or deferral strategies. Id. at 3-4. Staff further noted that the Crimson Orchard Project alone would
not fully address the anticipated capacity deficit. Id. at 4. Accordingly, Staff urged the Company
to present its strategy for meeting the remaining shortfall as soon as practicable. Id.
While Staff recommended the Commission approve the PPA and ESA, Staff also
recommended the Commission modify the contract terms to include clauses that outline an option
to purchase and add the need for Commission approval to any bilateral modifications made by the
parties. Id. at 5-6. Staff s recommendation also included that the payments associated with the
PPA and ESA be deemed prudent.Id. at 5.
Finally, Staff reviewed the Company's request for Commission approval of lease
accounting under the ESA.Id. at 6. Staff agreed with the Company's accounting proposal and that
it was consistent with Generally Accepted Accounting Principles.Id.
STAFF SUPPLEMENTAL COMMENTS
Staff reviewed the Company's Supplemental Application and believed that it proposed
additional cost risk be deemed prudent by the Commission. Staff Supplemental Comments at 2.
Staff argued that the Company should bear this additional cost risk and recommended approving
the amended agreements with a hard cap on prudently incurred costs based on the originally
submitted PPA and ESA. Id. Staff also reaffirmed its recommendation from its initial comments
to exclude the purchase options from a determination of prudence. Id.
AMENDED AND RESTATED
ORDER NO. 36881 4

Staff believed that the definitions related to the First Amendments to the PPA and ESA,
the revision to the force majeure definition, and additional language regarding equal employment
opportunity law were all reasonable. Id. at 3. Staff acknowledged the Company's changes to the
Bi-lateral Modification Clauses, noting that the Company incorporated Staff s suggestion to
require Commission approval. Id.
While acknowledging the capacity deficit in 2027, Staff reiterated its objection to having
to declare a project to be LC-LR because it is the only viable project. Id. at 5. Staff noted that the
Crimson Orchard Project was the third consecutive case in which the Company had requested
approval of a new resource that was the only viable option. Id. Staff outlined what it believed to
be various contributing factors to the situation of having no alternative projects,including: capacity
deficits in 2023-2025, Special Contracts, competing Company commitments, Boardman to
Hemingway delay, and limited types of resources. Id. at 5-8.
Finally, Staff believed that the Company should bear a proportional amount of the financial
risk rather than ratepayers exclusively. Id. at 8. Staff recommended that expenses be determined
prudent only up to the originally negotiated rates set forth in the PPA and ESA. Id.
IIPA COMMENTS
IIPA's comments included the direct testimony of Dr. Deborah Glosser. IIPA Comments
at 1. Dr. Glosser believed that the Company's Application and proposed investment was not
prudent, lacked sufficient cost containment mechanisms, and posed financial and operational risks
to ratepayers. Id. at 2. Dr. Glosser recommended the Commission: 1) deny the PPA; 2) deny the
ESA; and 3) decline to acknowledge the lease accounting necessary to facilitate the transaction
and that the resulting expenses were prudently incurred. Id. at 3. Dr. Glosser also recommended
that if the PPA and ESA are approved, the Commission should cap recoverable costs at the levels
projected in the Company's financial models.Id.
Dr. Glosser believed that if the Company's Application was approved, as filed, ratepayers
would bear risks including: ESA may subject ratepayers to substantial costs in the event of
underperformance, long-term financial risk if the Company's assumptions regarding ESA
escalation rate over 20-year term were downplayed,higher true project costs based on incremental
borrowing rate ("IBR") and weighted average cost of capital ("WACC") used in the Company's
models, delays in supply chain, fire risk being under modeled, and high debt through the PPA
could obscure true project costs in future rate cases.Id. at 4. Dr. Glosser believed these risks could
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ORDER NO. 36881 5

inflate the Crimson Orchard Project's economic value,potentially resulting in ratepayer exposure.
Id.
Dr. Glosser believed that the lack of performance guarantees in the ESA could subject
ratepayers to costs in the event of underperformance and expressed concerns.Id. at 4-5.Dr.Glosser
explained that ratepayers were exposed to financial risk without assurance that the project would
perform as promised over the 20-year term. Id. Dr. Glosser provided specific examples of terms
in the ESA that she believed were problematic and presented risk to ratepayers. Id. at 5-6. Dr.
Glosser believed that identified contract terms materially undermined a finding of prudency
because the risk of underperformance of capacity shifted to the ratepayers. Id. at 6.
Dr. Glosser believed that the Company's assumptions regarding escalation rate over the
20-year term downplayed long term financial risk. Id. at 7. Dr. Glosser believed that the
Company's assumed 0% escalation rate was unrealistic and failed to account for financial risks
associated with the economic reality of rising costs. Id. Dr. Glosser explained that utilities
commonly apply escalation rates in the 1%to 3%range. Id at 8. Dr. Glosser believed that the 0%
assumption could cause the Crimson Orchard Project to become financially unsustainable.Id. Dr.
Glosser recommended the Commission should consider capping the recovery of costs where the
Company assumed a zero percent escalation rate. Id. at 9.
Dr. Glosser believed that the IBR and WACC used in the Company's models were
inconsistent and misrepresented the true project costs. Id. Dr. Glosser noted that the WACC for
the overall project used in the Company's financial model was different than the IBR in the ESA
financial model and believed that the inconsistency suggested that the true cost of financing the
Crimson Orchard Project may be understated. Id. at 10. Dr. Glosser explained that the
inconsistency could lead to inaccurate cost recovery calculations, potentially causing unexpected
costs for ratepayers if the project underperforms. Id.
Dr. Glosser believed that supply chain and permitting delays could cause problems for the
planned commercial operation date of June 1, 2027. Id. at 11. Dr. Glosser believed that potential
points of delay included equipment procurement and that supply chain disruptions were likely due
to new tariffs on imports from China. Id. at 12. Dr. Glosser believed that these risks could
potentially be passed to ratepayers and should impact the prudency determination.Id. at 13.
Dr. Glosser believed that fire risk was not thoroughly modeled and that the provided
models were misleading. Id. Dr. Glosser stated that fire risk could potentially prevent operations
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ORDER NO. 36881 6

and reduce the value of the system. Id. Dr. Glosser believed that the Company failed to account
for potential heat-related performance limitations during critical summer peak periods by using a
historical outage method within its model to inform the capacity planning and procurement.Id. at
14. Dr. Glosser believed that the Company may be understating the resilience value and potential
cost savings in a system exposed to wildfire threats.Id. at 18.
Dr. Glosser believed that the debt the Company would acquire through the PPA may
obscure true project costs for future rate cases. Id. at 19. Last, Dr. Glosser reasoned that the
Company was not accounting for financial risks associated with imputed debt that may become
problematic because the debt is being treated as obligations instead of traditional debt.Id.
IIPA SUPPLEMENTAL COMMENTS
IIPA's Supplemental Comments incorporated new testimony into its Comments previously
filed by Dr. Glosser.
Dr. Glosser believed that the Company's Supplemental Application further elevated costs
by allowing increases which could compound, rather than mitigate, the underlying financial and
operational risks to ratepayers. IIPA Supplemental Comments at 4.
IIPA reiterated that the Commission should (1) deny the Crimson Orchard PPA, (2) deny
the Crimson Orchard ESA, and (3) decline to acknowledge the lease accounting is necessary to
facilitate the transaction and that the resulting expenses associated with both the PPA and ESA as
prudently incurred for ratemaking purposes.Id. at 21.
COMPANY REPLY
The Company argued that Staff s suggestion that the Company's decisions led to only one
remaining viable project was unreasonable. Company Reply at 3.
In response to Staff Comments that the Company made imprudent decisions regarding load
growth forecasts, the Company argued that there was no belated recognition of the capacity
deficiency nor was the capacity deficiency established to acquire new resources.Id. at 11-13.
The Company stated that it has an obligation to serve on a non-discriminatory basis within
its service area, which has created a need for the Company to acquire additional resources to meet
the capacity deficits on its system. Id. at 13. The Company believed that Staffs suggestion to
reduce or delay load growth was unreasonable and that it is the Company's best practice to set
realistic expectations around the availability of service for Special Contract customers. Id. at 13-
14. The Company also argued that after the 2021 IRP identified the 2027 capacity deficiency, the
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ORDER NO. 36881 7

2026 RFP process was started in September 2022. Id. at 14. The Company believed that it
adequately planned to meet its obligation to serve all load in its certificated service area as it is
required to do and the selection of the Crimson Orchard Project as a LC-LR resource was a
demonstration of those efforts.Id. at 15.
The Company believed that Staff was mistaken in its comment that deficits in 2026 and
2027 were only caused by new large-load customers.Id. The Company also noted that Staff failed
to identify that two new Special Contract customers have contracted with the Company to support
their load with incremental resources, paid for by the customer, to be online coincident with their
load.Id. at 15-16.
The Company also noted that project delays have been impacted by unforeseen
circumstances like state and federal agency delays,holdups on easements, and supply chain issues.
Id. at 16-17. The Company disagreed with Staff s assertion that the Company had deemphasized
natural gas resources in its 2026 RFP. Id. at 18. The Company argued that the 2026 RFP did not
restrict bids based on resource type and instead focused on commercial operation date. Id. The
Company maintained its position that the selection of the Crimson Orchard Project as a LC-LR
2027 resource was prudent based on the information available to the Company at the 2026 RFP
process. Id. at 20.
The Company also opposed Staffs recommendation that any financial risks associated
with the First Amendments to the PPA and ESA be borne by the Company.Id. at 21. The Company
argued that because the Crimson Orchard Project remains the LC-LR option, it should not bear
financial risks associated with the provisions of the First Amendments that were outside of the
Company's control. Id. at 22.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, 61-502,
and 61-503. The Commission is vested with the power to "supervise and regulate every public
utility in the state and to do all things necessary to carry out the spirit and intent of the [Public
Utilities Law]."Idaho Code§ 61-501.The Commission is empowered to investigate rates,charges,
rules,regulations,practices,and contracts of public utilities and to determine whether they are just,
reasonable,preferential,discriminatory,or in violation of any provision of law,and to fix the same
by order.Idaho Code §§ 61-502 and 61-503.
AMENDED AND RESTATED
ORDER NO. 36881 8

PPA and ESA
Having reviewed the Application, the Supplemental Application, and all submitted
materials, the Commission finds it fair, just, and reasonable to (1) approve the 20-year PPA
between Crimson Orchard and the Company; (2) approve the 20-year ESA between Crimson
Orchard and the Company; (3) approve the First Amendment to the PPA; and(4)approve the First
Amendment to the ESA.
Soft Cap and Future Recovery
The Commission finds that it is fair, just, and reasonable to establish a soft cap on the
prudency determination of expenses associated with the PPA,the ESA, and the First Amendments
to the PPA and the ESA. The Commission finds it reasonable that expenses—excluding the
Purchase Option provision—be deemed prudent only to the extent they do not exceed the
originally negotiated rates set forth in Confidential Exhibit 5 of the Application for the PPA and
Confidential Exhibit 4 of the Application for the ESA. The Purchase Options are excluded from
this determination with the understanding that the Company can pursue prudence and recovery if
it elects to exercise the Purchase Options. While the Company is always required to provide
sufficient justification to recover costs for its prudently incurred investments,to recover above the
soft cap for any additional costs associated with the First Amendments to the PPA and the ESA
we expect additional justification to support the Company's request.
Load Growth
As an additional matter, the Commission has previously discussed and continues to
acknowledge the Company's sustained load growth and the growing capacity shortfalls that
accompany it. The Commission continues to share concerns raised in this and other proceedings
about how anticipated load increases affect the Company's resource-acquisition process and the
types of resources ultimately chosen. Although the Commission recognizes that the Company has
an obligation to serve all customers when service is requested, that obligation may be constrained
by the procurement and resource selection process. Those limits may require more reasonable
development timelines to ensure that the Company's system reliability, and its customers, are not
at risk by rapid increases in load that could otherwise be managed and implemented more
gradually.
The Commission appreciates that the parties expressed concerns and the need for additional
transparency in Idaho around the resource procurement process. As the Company proceeds with
AMENDED AND RESTATED
ORDER NO. 36881 9

the 2028 RFP, the Commission directs the Company to report to the Commission the status and
provide the shortlisted projects followed by a formally noticed meeting discussing the report.
IIPA Intervenor Funding
Intervenor funding is available pursuant to Idaho Code § 61-617A and IDAPA §§
31.01.01.161 through 165.Idaho Code § 61-617A(1)provides that it is the "policy of this state to
encourage participation at all stages of all proceedings before the commission so that all affected
customers receive full and fair representation in those proceedings."The Commission may award
a cumulative amount of intervenor funding not to exceed $40,000 for all intervening parties in a
single case. Idaho Code § 61-617A(2).
IDAPA Rule 162 provides the form and content of petitions for intervenor funding. Each
petition must contain: (1)an itemized list of expenses broken down into categories; (2) a statement
of the intervenor's proposed findings or recommendation; (3) a statement showing that the costs
the intervenor wishes to recover are reasonable; (4) a statement explaining why the costs constitute
a significant financial hardship for the intervenor; (5) a statement showing how the intervenor's
proposed recommendations differed materially from the testimony and exhibits of the Staff; (6) a
statement showing how the intervenor's recommendation or position addressed issues of concern
to the general body of the utility users or consumers; and (7) a statement showing the class of
customer on whose behalf the intervenor appeared. IDAPA 31.01.01.162.
IIPA is a nonprofit organization. Based upon the Commission's review of IIPA's
Application, the Commission finds that the funding request complies with the procedural and
substantive requirements of the statute and the rules. The Commission finds that IIPA has
materially contributed to the Commission's decision-making; IIPA's participation added a unique
and well-informed perspective to the record; and it is fair,just, and reasonable to award intervenor
funding. The Commission finds it appropriate to award IIPA intervenor funding in the amount of
$10,420.25. The award shall be chargeable to the irrigation customer class under Schedule 24 of
the Company's system.Idaho Code § 61-617A(3).
ORDER
IT IS HEREBY ORDERED that the 20-year PPA and First Amendment thereto, between
Crimson Orchard and the Company, supplying 100 MW to the Company, is approved.
AMENDED AND RESTATED
ORDER NO. 36881 10

IT IS FURTHER ORDERED that the 20-year ESA and the First Amendment thereto,
between Crimson Orchard and the Company, for 100 MW of dispatchable energy storage capacity,
is approved.
IT IS FURTHER ORDERED that expenses, excluding the Purchase Option provision, are
prudent only to the extent they do not exceed the originally negotiated rates set forth in
Confidential Exhibit 5 of the Application for the PPA and Confidential Exhibit 4 of the Application
for the ESA.
IT IS FURTHER ORDERED that IIPA's petition for intervenor funding is granted in the
amount of$10,420.25.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order about any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 29t'day of
December 2025.
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EDWARD LODGE, RES NT
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OHN R. HAMMOND JR., COMMISSIONER
DAYN HARDI , COMMISSIONER
ATTE
ra Calderon Robles
Interim Commission Secretary
I:\Legal\ELECTRIC\IPC-E-25-10_Crimson\orders\IPCE2510_final_amended_em.doex
AMENDED AND RESTATED
ORDER NO. 36881 11