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HomeMy WebLinkAbout20260112Petition for Clarification and_or Reconsideration.pdf w@10AW POWER@ DONOVAN WALKER RECEIVED JANUARY 12, 2026 Lead Counsel IDAHO PUBLIC dwalker(aD_idahopower.com UTILITIES COMMISSION January 12, 2026 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-25-10 Idaho Power Company's Application for Approval of a Power Purchase Agreement and an Energy Storage Agreement with Crimson Orchard Solar LLC Dear Commission Secretary: Attached for electronic filing is Idaho Power Company's Petition for Clarification and/or Reconsideration in the above-referenced matter. If you have any questions about any of the aforementioned document, please do not hesitate to contact me. Very truly yours, Donovan E. Walker DEW:sg Attachment 1221 W. Idaho St(83702) P.O. Box 70 Boise, ID 83707 DONOVAN E. WALKER (ISB NO. 5921 LISA C. LANCE (ISB No. 6241) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-5317 Facsimile: (208) 388-6936 dwalker idahopower.com I lance(a-)idahopower.com Attorneys for Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER ) COMPANY'S APPLICATION FOR ) CASE NO. IPC-E-25-10 APPROVAL OF A POWER PURCHASE ) AGREEMENT AND AN ENERGY STORAGE ) IDAHO POWER COMPANY'S AGREEMENT WITH CRIMSON ORCHARD ) PETITION FOR CLARIFICATION SOLAR LLC. ) AND/OR RECONSIDERATION Idaho Power Company ("Idaho Power" or "Company"), petitioner herein, pursuant to Rules of Procedure ("RP") 33, 325, and 331, et seq., and Idaho Code § 61-626, hereby respectfully petitions the Idaho Public Utilities Commission ("Commission" or "IPUC") for clarification and/or reconsideration of Amended and Restated Final Order No. 36881, dated December 29, 2025, issued in Case No. IPC-E-25-10 ("the Order"). Idaho Power seeks clarification of its understanding of those portions of Order No. 36881 regarding: (1) the Soft Cap and Future Recovery; (2) approval of the First Amendments to the Power Purchase Agreement ("PPA") and Energy Storage Agreement ("ESA"); and (3) the requested approval of the lease accounting necessary to facilitate the transaction. The Petition is based on the following: IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 1 I. LEGAL STANDARD Any person may petition to clarify any order of the Commission and such petition for clarification may be combined with or alternatively stated as a petition for clarification and/or reconsideration. RP 325. The Commission may clarify any order on its own motion. Id. A party may seek reconsideration prior to initiating an appeal to the Idaho Supreme Court. Idaho Code §61-627. An issue not presented to the Commission on reconsideration will not be considered on appeal. Key Transp. Inc v. Trans Magic Airlines Corp., 96 Idaho 110, 524 P.2d 1338 (1974). "The purpose of an application for rehearing is to afford an opportunity to the parties to bring to the attention of the Commission in an orderly manner any question theretofore determined in the matter and thereby afford the Commission an opportunity to rectify any mistake made by it before presenting the same to this Court." Washington Water Power Co., v. Kootenai Environmental Alliance, 99 Idaho 875, 879, 591 P.2d 122,126 (1979) (citing Idaho Underground Water Users Assn v. Idaho Power Co., 89 Idaho 147, 404 P.2d 859 (1965); Consumer Co. v. Public Utilities Comm'n, 40 Idaho 772, 236 P. 732 (1925)). The Commission may grant reconsideration by reviewing the existing record, by submissions of briefs, memoranda, written comments, interrogatories, and statements or by evidentiary hearing. RP 331, 332. II. BACKGROUND On March 13, 2025, Idaho Power filed its Application in this matter requesting an order: (1) approving the 20 year PPA between Crimson Orchard Solar LLC ("Crimson Orchard") and the Company to supply 100 megawatts ("MW") output to the Company; (2) approving the 20 year ESA between Crimson Orchard and the Company for 100 MW of IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 2 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 ESA are prudently incurred for ratemaking purposes. On August 15, 2025, the Company filed a Supplemental Application, submitting First Amendments to both the PPA and ESA seeking approval of the same. In the Supplemental Application the Company states that given the immediate deficits on Idaho Power's system combined with the constrained generation construction and procurement environment and the lack of other viable options, the Crimson Orchard Project remains the least-cost, least risk, prudent resource for the Company to meet its obligations to serve customers in 2027 and beyond and consequently sought approval of the Amended PPA and ESA. Staff filed initial Comments on August 1, 2025, and Supplemental Comments on October 3, 2025. Comments and Updated Comments were also filed by the Idaho Irrigation Pumpers Association, Inc. ("I IPA"). Reply Comments were filed by the Company on October 17, 2025. On December 29, 2025, the Commission issued Amended and Restated Order No. 36881 . The Order (1) approves the 20-year PPA and the First Amendment thereto between Crimson Orchard and the Company; (2) approves the 20- year ESA and the First Amendment thereto between Crimson Orchard and the Company; and (3) orders 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 No. 4 of the Application for the ESA. IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 3 III. PETITION FOR CLARIFICATION AND/OR RECONSIDERATION Idaho Power respectfully asks the Commission to grant clarification of its understanding of Order No. 36881 on three specific issues: (1) the Soft Cap and Future Recovery; (2) approval of the First Amendments to the PPA and ESA; and (3) the requested approval of the lease accounting necessary to facilitate the transaction. To the extent the Commission determines the Company has not interpreted its order correctly, then Idaho Power respectfully requests reconsideration of the issues identified herein. A. Soft Cap and Future Recovery. The Commission's Findings and Decision regarding implementation of a Soft Cap and Future Recovery from Order No. 36881 are set out on page 9 under a heading with that same title: The Commission finds 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 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 with the Frist Amendments to the PPA and the ESA we expect additional justification to support the Company's request. This language was reiterated in the Commission's Ordering paragraphs: 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 IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION -4 Confidential Exhibit 5 of the Application for the PPA and Confidential Exhibit 4 of the Application for the ESA. Order No. 36881, p 11. The Company interprets this language from the Soft Cap and Future Recovery section of Order No. 36881, page 9, and the Ordering paragraph on page 11 as approving the contract provisions, but allowing the Commission to make a prudence determination on Purchase Options and additional costs associated the First Amendments to the PPA and the ESA at a future date once additional justification is provided to support the Company's request. Idaho Power respectfully requests the Commission clarify that while the Purchase Options and additional costs associated with the First Amendments to the PPA and ESA were not deemed prudent in this case, such additional costs were not thereby deemed to be imprudent. Rather, the prudence determination thereof was deferred to a future date and the Company is not precluded from the future recovery of these costs but must submit additional justification to support such request. B. Approval of First Amendments and the Price Adjustment Mechanism. The Commission's Findings and Decision regarding approval of the PPA and ESA as well as the First Amendments thereto from Order No. 36881 are set forth on page 9 under the heading "PPA and ESA": Having reviewed the Application, the Supplemental Application, and all submitted materials, the Commission find 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. This language was reiterated in the Commission's Ordering paragraphs: IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 5 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. 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. Order No. 36881, p 10-11. The Order approves the 20-year PPA and ESA as well as the First Amendments thereto which include the price adjustment mechanisms contained in the First Amendments. The First Amendments allow for the prices to adjust both up and down as well as containing caps on the potential for price increases. While the Company understands the Commission's request for additional justification of costs associated with the First Amendments at a later date, such additional justification of potential additional costs associated with the First Amendments, as referenced in section A above, would necessarily be based around implementation of the price adjustment mechanisms contained within the approved First Amendments. The Company is requesting clarification that the approval of the PPA and ESA and the First Amendments thereto as outlined in the Order is inclusive of the price adjustment mechanism in the First Amendments. C. Approval of Lease Accounting. Idaho Power requested in both the Application and Supplemental Application the Commission's acknowledgment of the capital lease accounting treatment of the ESA under Generally Accepted Accounting Principles ("GAAP"). Staff's Comments stated that it agreed with the Company's accounting proposals regarding the lease and that the method described is consistent with GAAP. Staff Comments, p 6-7. Staff's Comments IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 6 and Supplemental Comments both recommend that the Commission acknowledge the proposed use of lease accounting for the ESA. Staff Comments, p 7, Staff Supplemental Comments, p 9. Because Order No. 36881 is silent as to the requested lease accounting treatment for the ESA, Idaho Power hereby respectfully seeks clarification as to the Commission's acknowledgement of the requested lease accounting. IV. NATURE AND EXTENT OF EVIDENCE AND ARGUMENT TO BE OFFERED ON RECONSIDERATION Idaho Power respectfully requests that the Commission clarify its Order No. 36881 as set forth herein. Alternatively, should the Commission determine that clarification is not warranted or significantly differs from the Company's understanding and interpretation of Order No. 36881, then the Company respectfully requests that this Petition be treated as a Petition for Reconsideration. In such instance, Idaho Power requests that the Commission allow appropriate additional process upon reconsideration for the Company to supplement the alternative request for reconsideration in this petition including additional comments, legal briefing, testimony, exhibits, and hearing, any or all of which as determined to be appropriate at the discretion of the Commission. V. CONCLUSION Idaho Power respectfully requests that the Commission issue an order granting clarification of the Company's understanding of those portions of Order No. 36881 regarding (1) the Soft Cap and Future Recovery; (2) approval of the First Amendments to the PPA and ESA; and (3) the requested approval of the lease accounting necessary to facility the transaction as set forth above and herein or alternatively, for reconsideration. IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 7 Respectfully submitted this 12th day of January 2026. DONOVAN E. WALKER Attorney for Idaho Power Company IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 8 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 12th day of January 2026, 1 served a true and correct copy of Idaho Power Company's Petition for Clarification and/or Reconsideration upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Hand Delivered Erika K. Melanson U.S. Mail Deputy Attorney General Overnight Mail Idaho Public Utilities Commission FAX 11331 W. Chinden Blvd., Bldg No. 8 FTP Site Suite 201-A (83714) X Email Erika.Melanson(a�puc.idaho.gov PO Box 83720 Boise, ID 83720-0074 Micron Technology, Inc. Hand Delivered Austin Rueschhoff U.S. Mail Thorvald A. Nelson Overnight Mail Austin W. Jensen FAX Kristine A.K. Roach X Email darueschhoff(c hol land ha rt.corn Holland & Hart LLP tnelson(cDhol land hart.com 555 17th Street, Suite 3200 awjensen hollandhart.com Denver, CO 80202 aclee(a�hol land hart.com karoach hollandhart.com Idaho Irrigation Pumpers Association, Inc. Hand Delivered Eric L. Olsen U.S. Mail ECHO HAWK & OLSEN, PLLC Overnight Mail 505 Pershing Avenue, Suite 100 FAX P.O. Box 6119 X EMAIL elo echohawk.com Pocatello, ID 83205 Lance Kaufman, Ph.D. Hand Delivered 2623 NW Bluebell Place U.S. Mail Corvallis, OR 97330 Overnight Mail FAX X EMAIL Iance(u)aegisinsight.com Stacy Gust Regulatory Administrative Assistant IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION - 9