20260203Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER LODGE
COMMISSIONER HAMMOND
COMMISSIONER HARDIE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: MATTHEW E. SUESS, COMMISSION STAFF
ERIKA K. MELANSON,DEPUTY ATTORNEY GENERAL
DATE: FEBRUARY 3, 2026
RE: IDAHO POWER'S ANNUAL COMPLIANCE FILING TO UPDATE
CHARGES, CREDITS, AND GENERAL OVERHEADS UNDER RULE H,
NEW SERVICE ATTACHMENTS AND DISTRIBUTION LINE
INSTALLATIONS OR ALTERATIONS; CASE NO. IPC-TAE-25-03.
BACKGROUND
On December 31, 2025, Idaho Power Company ("Company") filed Tariff Advice No. 25-
03 with the Idaho Public Utilities Commission ("Commission") proposing to update charges and
allowances to the Company's Rule H tariff, New Service Attachments and Distribution Line
Installations or Alterations ("Application"). The Company is required to make this annual
compliance filing to update the Rule H charges and credits by way of Commission Order Nos.
30853 and 30955. The Company is also required to update the general overhead rate used within
the Rule H tariff through Commission Order No. 32472. The filing requests that the Commission
approve the update by March 1,2026,to facilitate implementation of the Rule H tariff revisions to
meet an effective date of March 15, 2026.
STAFF ANALYSIS
Staff reviewed the Company's Rule H compliance filing and focused on: (1)the adjustment
to overhead rates applied to work order costs; (2)the updated costs for standard service attachment
charges; (3) the revisions to line installation and attachment allowances; and (4) the update to the
rate charged for engineering services. The cost estimation method used to update these charges
and credits is the same as used in prior annual filings. Overall, vehicle and labor expenses went
DECISION MEMORANDUM - 1 - FEBRUARY 3, 2026

up slightly,but material expenses were flat or lower. Therefore, most of the proposed charges and
credits increased,but a few decreased, depending on each activity's emphasis on vehicle, labor, or
material expenses. The general overhead rate was essentially unchanged.
Overhead Rates
Staff verified the Company's general overhead rate and Company stores loading rate. Staff
believes these rates to have a sound basis and to be fair,just, and reasonable. Staff recommends
the Commission approve the proposed general overhead rate and Company stores loading rate.
General overhead captures costs that cannot be directly assigned to a specific asset or
individual project. The Company's general overhead rate is applied to all direct costs related to
vehicles, labor,materials, and trenching. Compared to last year's filing,the general overhead rate
increased from 9.42 percent to 9.43 percent. Staff verified Company inputs and calculations and
believes they are accurate.
The Company stores loading rate captures the cost of supervision, labor, and expenses
incurred for the purchasing,storage,handling,and distribution of material and supplies. Compared
to last year's filing, the Company stores loading rate increased from 4.75 percent to 6.50 percent.
The Company evaluates the Company stores loading rate quarterly to determine whether an
adjustment is needed to align the clearing rate with year-to-date stores expenses and issuances
while considering forecasted activity. Staff verified Company inputs and calculations and believes
they are accurate.
Standard Charges
Standard charges are established for the installation of underground services, temporary
service attachments, and return trip services. The installation of underground services includes
both base and distance charges. Some charges went up, with a maximum increase of 7 percent,
while others went down, with a maximum decrease of 2 percent. Staff reviewed all changes to
vehicle, labor, material, and trenching costs used to develop the standard charges. Staff believes
the Company's proposed amounts are justified.
DECISION MEMORANDUM - 2 - FEBRUARY 3, 2026

Line Installation and Service Attachment Allowances
Service attachment allowances are provided to customers to compensate for distribution
costs the Company recovers through base retail rates. Customers receive the allowance as a credit
against the cost of new line installation and terminal facilities. This year, the single-phase
allowance decreased by 11 percent, and the three-phase allowance increased by 2 percent. The
relatively large decrease in the single-phase allowance was driven by a $500 decrease in the cost
of 25 kilovolt-amp transformers (19 percent). Staff believes this is justified.
Engineering Services
Engineering costs for line installations and alterations have increased from$97 per hour to
$101 per hour. This 4 percent increase is driven by a 3 percent wage increase and a 7 percent
benefit increase. Staff believes both the wage and benefit increases are in line with previous years,
and the annual wage rate is in line with the statewide median for electrical engineers.' For these
reasons, Staff believes that the increase in Engineering Services cost is reasonable.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Company's proposed general
overhead rate of 9.43 percent and changes to the Rule H charges and allowances reflected in the
Company's original filing,dated December 31,2025, as filed. Staff recommends an effective date
of March 15, 2026.
COMMISSION DECISION
Does the Commission wish to approve the Company's proposed updates to the general
overhead rate and the Rule H charges and allowances as filed with an effective date of March 15,
2026?
Matthew E. ess
Commission Staff
I:\Utility\UDMEMOS\IPC-TAE-25-03 Decision Memo.docx
'According to Glassdoor.com the statewide median pay for electrical engineers in 2025 was$123K per year.
DECISION MEMORANDUM - 3 - FEBRUARY 3, 2026