20260123Staff Comments.pdf

RECEIVED
January 23, 2026
ERIKA K. MELANSON IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83702
[phone]
IDAHO BAR NO. 11560
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S APPLICATION FOR A ) CASE NO. IPC-E-25-29
CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY FOR THE BENNETT GAS )
EXPANSION PROJECT AND FOR AN ) COMMENTS OF THE
ASSOCIATED ACCOUNTING ORDER ) COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its attorney of record, Erika K. Melanson, Deputy Attorney
General, submits the following comments.
BACKGROUND
On September 19, 2025, Idaho Power Company("Company") applied to the Commission
requesting the Commission: (1) grant a Certificate of Public Convenience and Necessity
("CPCN") for the expansion of the existing Bennett Mountain Power Plant to include the
addition of the Bennett Gas Expansion Project("Project"); (2) confirm the Company's
application of the accrual of Allowance for Funds Used During Construction ("AFUDC") for the
Project upon initial procurement activities for the reciprocating internal combustion engines; and
(3) approve the commencement of the accrual of AFUDC on capital expenditures associated
with future resource procurements at the time the Project has been deemed viable by the
Company.
STAFF COMMENTS I JANUARY 23, 2026

On October 15, 2025,the Commission issued a Notice of Application and Notice of
Intervention Deadline, setting a deadline for interested parties to file a petition to intervene.
Order No. 36802. Intervention was granted to Idaho Irrigation Pumpers Association, Inc. and
Micron Technology, Inc. Order Nos. 36804 and 36830.
STAFF ANALYSIS
Staff reviewed the Company's Application and supporting documentation and
recommends that the Commission grant a CPCN for the Project because:
1. The Company was able to demonstrate that the Project is needed to provide system
capacity to ensure system reliability;
2. The Project is the least-cost least-risk resource when compared to other viable
resources; and
3. The Company has met the regulatory requirements to obtain a CPCN.
Although Staff believes the decision to move forward with the Project is prudent, Staff
recommends that prudence of the final cost be determined based on actual cost when the
Company seeks recovery in rates.
Staff also recommends that the Commission support the accrual of AFUDC for the
Project upon initial procurement of the engines but does not recommend that the Commission
grant blanket approval for the early accrual of AFUDC for other unknown future resource
procurements.
Project Scope
The Project consists of nine fast ramping, natural gas fuel reciprocating engines that are
flexible to provide between 10 and 167 megawatts ("MW") of generation. Application at 8. The
Project will be located next to the existing Bennett Mountain Power Plant. Id. The Company
plans to begin construction in the second quarter of 2026 following the approval of its CPCN,
with a commercial operation date ("COD") of June 2028. See Company's Response to
Production Request Nos. 10, 19.
The Project also requires a gas-supply upgrade. See Company's Response to Staff
Production Request No. 19. The gas-supply upgrade has two parts: (1)upgrading the Northwest
Williams ("Willliams") Pipeline gas tap, and(2) a new site lateral tie-in to the Project. Id. The
STAFF COMMENTS 2 JANUARY 23, 2026

Williams Pipeline owner will perform the gas tap upgrade over an 18-month schedule, which is
depicted in the Company's Gantt chart in its Response to Staff Production Request No. 10 -
Attachment. The Company anticipates this portion of the Project to be complete by early 2027.
See Company's Response to Staff Production Request No. 19.
Need for New Resources Exists
The Company states that "the most recent system reliability assessment has identified a
capacity deficit of 265 MW in 2028." Ellsworth Direct at 9. Staff agrees that the Company's
system faces a capacity deficit in 2028 and therefore, additional resources are necessary to
ensure system reliability.
Staff reviewed the load and resource assumptions that the Company used to make this
determination and concludes that the true capacity deficit may be larger than 265 MW. Staffs
conclusion assumes successful completion of nine other large generation or transmission projects
that are scheduled for CODs in 2026 or 2027,1 and excludes the Jackalope Wind project, which
was recently cancelled in Case No. IPC-E-25-28. If any of the nine projects are delayed, the
capacity deficit will be larger. Therefore, Staff believes that additional cost-effective resources
are necessary to ensure system reliability.
The Project is a Least-Cost and Least-Risk Resource
Staff believes that the Blacks Creek project is a least-cost, least-risk("LC-LR")resource.
Staff s conclusion is based on three criteria: (1)the quality of the selection process conducted
through the Company's Request for Proposal ("RFP"); (2) whether the selected resource from
the REP was least cost; and (3) whether the resource selected from the RFP minimizes risk.
The 2028 RFP Selection Process was Fair and Reasonable
The fairness of the 2028 All-Source RFP process is foundational to any of its results.
Staff carefully reviewed Company Witness Hackett's testimony and Exhibit No. 3, the closing
12026= 125 MW Pleasant Valley Solar#2; 150 MW Boise Bench BESS; 50 MW Hemingway BESS Addition#2;
50 MW Boise Bench BESS Expansion.
2027= 100 MW Crimson Orchard Solar; 100 MW Crimson Orchard BESS; 80 MW Blacks Creek Solar;500 MW
Boardman to Hemingway Transmission; 320 MW Blacks Creek Solar.
STAFF COMMENTS 3 JANUARY 23, 2026

report from the Independent Evaluator("IE"). Based on this review, Staff believes the selection
process was fair and reasonable.
Staff agrees that the Company's RFP "allowed bids for all commercially viable resource
types that could meet the specified commercial operation date." Hackett Direct at 12. Staff also
agrees that the bifurcation of the bids into two groups was reasonable: Group One consisting of
bids with a COD on or before April 2028, and Group Two consisting of bids with a COD beyond
April 2028. Staff believes that there was a sufficient number of bids in each group to ensure
adequate competition in each group. This project was placed in Group Two and was one of 83
proposals from 18 different bids in that group. Id. at 13.
Staff also believes the Company's evaluation of Group Two bids was fair and reasonable.
First, the IE affirmed the reasonableness in its closing report, stating "LEI attests to the
reasonableness of IPC's approach in identifying bids for the final [All-Source] RFP shortlist.
The process was conducted with the utmost fairness and impartiality,upholding the integrity of
the selection process." Exhibit No. 3 at 12. Second, Staff independently examined the
Company's calculations for each bidder's levelized cost of capacity ("LCOC"), because those
values are a major determinant in which resources are identified as LC-LR. See Confidential
Attachment to Company's Response to Staff Production Request No. 3. Staff believes that the
LCOC values were fairly and reasonably determined. Accordingly, Staff agrees that the Group
Two preliminary final short list("FSL") was reasonably determined.
The Project is a Least-Cost Resource
Staff believes that the Project is a least-cost resource based on its top-tier outcome in the
Group Two FSL and its unique status as the only dispatchable resource.
After the Company determined the preliminary Group Two FSL, the Company performed
stochastic analyses to determine which combination of projects was the least-cost across a wide
variety of future conditions. The projects were then ranked according to their contributions to
the optimal portfolios. Confidential Exhibit No. 2 lists the ranked FSL projects. The Project is
among the top performing bids. Staff independently verified this analysis. See Confidential
Attachment to Company's Response to Staff Production Request No. 4.
Due to the Project being a Company self-build project, Staff also attempted to identify
the next least-cost resource to cap any potential cost overrun. This proved to be infeasible
STAFF COMMENTS 4 JANUARY 23, 2026

because least-cost resources are determined by the net present value ("NPV") of the entire
portfolio over 20 years of modeling. The Project was the only dispatchable resource among all
the FSL proposals, since it could only be replaced by significantly larger amounts of variable
energy resources and energy storage resources. This much larger initial capital expense is
compounded by the imminent sunset of associated tax credits. In short, the NPV of a portfolio
without this resource is significantly higher than the NPV of a portfolio with this resource. See
Confidential Company's Response to Staff Production Request No. 21. Staff believes this is
further evidence that the Project is a least-cost resource. However, Staff will determine final
prudence of the resource to ensure it is implemented cost-effectively based on actual cost when
the Company seeks rate recovery.
Since this is a self-build project, the typical contractual cost overrun protection does not
exist(or is pushed down to a smaller sub-part of the Project). If the Company's final
construction cost exceeds its bid proposal amount, Staff believes the Company will seek to
recover the full cost from ratepayers. Accordingly, the prudence and recovery allowed for this
Project should occur in a separate ratemaking filing. However, to assist in resolving that future
filing, Staff includes in its comments confidential Attachment A, which is a synthesis of the
Company's bid proposal details. This data was obtained from the Company's Response to Staff
Production Request Nos. 9, 11, and 18.
The Project is a Least-Risk Resource
Staff believes the Project is a least-risk resource due to: (1)the anticipated reduction of
the overall capacity deficit, (2)the expedited timeframe for the Project to be brought online, (3)
lack of fuel-supply risk, and(4) lack of permitting risk.
Staff agrees with Company Witness Ellsworth who stated, "...the addition of the gas
facility would reduce the 2028 capacity deficit of 265 MW to a capacity deficit of 155 MW."
Ellsworth Direct at 10. Staff believes that this proposed resource would aid in the reduction of
risk to reliability by reducing the capacity deficit. Furthermore, Staff agrees that the Project will
reduce the capacity deficit by a larger magnitude in years 2029 and beyond because the Project
will be able to contribute its capacity for the full year instead of half a year in 2028.2
2 Ellsworth Direct at 13,Table 2 shows 156 MW capacity deficit reductions in 2029 and 2030.
STAFF COMMENTS 5 JANUARY 23, 2026

Staff also notes that the Project reduces system reliability risk because it can be brought
online quicker than most of the other FSL projects. Figure 41 of Confidential Exhibit No. 3
shows that the Project is one of only four with a COD in 2028. The remaining eight projects
have a 2029 delivery year.
Staff does not believe there is a fuel supply risk to the Project. The Project will require
additional natural gas supply from the existing Williams Pipeline. In its Response to Staff
Production Request No. 17, the Company explained that it purchased additional capacity in
September 2024 and that the new capacity contract term began November 1, 2025, and will end
on October 31, 2042, with unilateral renewal provisions. The Company was able to secure a
capacity volume equal to 32,179 dekatherms per day at a discounted rate. The Company
believes this incremental capacity is sufficient to fuel the Project. Id.
Staff believes that the permit risk is reasonable at this point in the process. For the
construction of the Project, the Company secured its Conditional Use Permit from Mountain
Home Department of Development—Planning and Zoning Division on May 20, 2025. See
Company's Response to Staff Production Request No. 12. Also, the Company is still awaiting
its Air Permit—Permit to Construct from Idaho Department of Environmental Quality ("DEQ").
Id. The Company expects the DEQ permit to be issued by June 15, 2026, which is aligned with
the Project's timeline as shown in the Gantt chart provided in the Company's Response to Staff
Production Request No. 10.
For the permits needed to upgrade gas supply to the site, the Project requires modification
to an existing Bureau of Land Management ("BLM") easement permit. The Company
anticipates the modified BLM permit to be issued by Fall of 2026. See Company's Response to
Staff Production Request No. 19.
Regulatory Requirements to Obtain a CPCN
Under Idaho Code § 61-528, the Company must show the financial ability, good faith,
and necessity of additional service in the community to receive a CPCN. Additionally, to obtain
a CPCN, the Company must follow Commission Rule of Procedure 112. Through discovery and
review of the Company's Application, Staff believes that the Company has met the necessary
regulatory requirements for a CPCN.
STAFF COMMENTS 6 JANUARY 23, 2026

Accounting Treatment for AFUDC Accrual
AFUDC is a monthly interest accrual, recognizing the opportunity cost the Company is
incurring, allowing for funding of capital assets needed to improve or expand the system as the
assets are being constructed. When a project is placed into service, the AFUDC accrual is
incorporated into the overall cost of the asset and becomes part of rate base. In a future rate case,
and after the Project is completed, the Company may seek recovery on the total cost of the
Project if deemed prudent, including AFUDC, less accumulated depreciation.
The Company began accruing AFUDC in March 2025, when the initial procurement
activities occurred.3 Typically, the Company does not start accruing AFUDC on generating
resources until a project is identified as the LC-LR resource and acknowledged by the Oregon
Public Utilities Commission ("OPUC"). Once the OPUC acknowledges the resource, the
Company begins to spend capital and accrue AFUDC. For the Company to complete this Project
in time to meet system capacity needs, the Company made a down payment in April 2025 on
necessary components, several months before the OPUC acknowledged the resource.4 Staff
verified the Company chose the only vendor that had a lead time that aligned with the capacity
date needed.5 Staff verified the down payment amount by reviewing the associated invoice.6
The OPUC subsequently acknowledged the resource as viable in August 2025. Staff believes the
Company's request for authorization to accrue AFUDC starting upon initial procurement
activities is reasonable for this Project and recommends approval.
AFUDC Accrual on Future Resource Procurements
The Company also requests authorization for AFUDC accrual on expenditures associated
with future resource procurements beginning at the time projects are deemed viable by the
Company. Currently, the Company has not made additional investments to procure additional
resources for any other projects prior to obtaining OPUC approval.' Staff commends the
Company's dedication to serving customer capacity needs and incurring costs prematurely.
However, if future circumstances occur where the Company is required to make payments on
3 See Response to Staff Production Request No. 6.
4 The Company is financing the Project with a combination of available cash,credit,debt,and future equity
infusions.
s See Response to Staff Production Request No. 5d.
6 See Response to Staff Production Request No. 5b.
See Response to Staff Production Request No. 7.
STAFF COMMENTS 7 JANUARY 23, 2026

components before OPUC acknowledgement, Staff recommends the Company follow a similar
approach used in this case, accruing AFUDC on initial procurement activity and requesting
approval of the AFUDC accrual during the CPCN filing. Staff recommends the Commission
deny the request for blanket AFUDC accrual when the Company deems a project as a viable
resource.
STAFF RECOMMENDATION
Staff recommends the Commission:
• Issue a CPCN for the Bennett Gas Expansion Project;
• Clarify that prudence of the final cost will be determined based on actual cost when
the Company seeks recovery in rates;
• Approve AFUDC accrual for the Project,beginning at initial procurement activities;
and
• Deny the Company's request for blanket early AFUDC accrual on future resource
procurements.
Respectfully submitted this 23rd day of January 2026.
Erika K. Melanson
Deputy Attorney General
Technical Staff. Matt Suess, Kimberly Loskot, James Chandler
I:\Utility\UMISC\COMMENTS\IPC-E-25-29 Comments.docx
STAFF COMMENTS 8 JANUARY 23, 2026

CONFIDENTIAL
Attachment A
Case No. IPC-E-25-29
Staff Comments
January 23, 2026

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 23RD DAY OF JANUARY 2026,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF IN CASE
NO. IPC-E-25-29, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
Idaho Power Company:
DONOVAN E. WALKER TIM TATUM
LEAD COUNSEL VICE PRESIDENT, REGULATORY
IDAHO POWER COMPANY AFFAIRS
1221 WEST IDAHO STREET (83702) IDAHO POWER COMPANY
PO BOX 70 1221 WEST IDAHO STREET (83702)
BOISE ID 83707-0070 PO BOX 70
E-MAIL: BOISE ID 83707-0070
dwalker(a,idahopower.com E-MAIL:
docketskidahopower.com ttaturnkidahopower.com
Intervenor Intervenor
IIPA MICRON
Eric L. Olsen Austin Rueschhoff
Echo Hawk& Olsen, PLLC Thorvald A. Nelson
P.O. Box 6119 Austin W. Jensen
505 Pershing Ave., Ste. 100 Kristine A.K. Roach
Pocatello, ID 83205 Holland&Hart, LLP
elo(&,echohawk.com 555 171h St., Ste. 3200
taysha(kechohawk.com Denver, CO 80202
E-MAIL:
Lance Kaufman, Ph.D. darueschhof[&hollandhart.com
2623 NW Bluebell Place tnelsonAhollandhart.com
Corvallis, OR 97330 awjensen&hollandhart.com
E-MAIL: lancegae isg insi hg t.com karoachAhollandhart.com
aclee(khollandhart.com
tlfriel Ahollandhart.com
PATRICIA JORD , SECRETARY
CERTIFICATE OF SERVICE