20260310Final_Order_No_36958.pdf

Office of the Secretary
Service Date
March 10,2026
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER ) CASE NO. IPC-E-25-29
COMPANY'S APPLICATION FOR A )
CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY FOR THE BENNETT GAS ) ORDER NO. 36958
EXPANSION PROJECT AND FOR AN )
ASSOCIATED ACCOUNTING ORDER )
On September 19, 2025, Idaho Power Company("Company") applied to the Idaho Public
Utilities Commission("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 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.
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. ("IIPA") and
Micron Technology, Inc. ("Micron"). Order Nos. 36804, 36830.
On November 24, 2025, the Commission issued a Notice of Modified Procedure,
establishing deadlines for public comments, and the Company to file reply comments. Order No.
36854.
Based on our review of the record, the Commission now issues this Final Order granting
the CPCN for the expansion of the Bennet Mountain Power Plant to include the Project,approving
the accrual of AFUDC for the Project upon the initial procurement of the reciprocating internal
combustion engines, and denying the commencement of the accrual of AFUDC on capital
expenditures associated with future resource procurements, as described herein.
ORDER NO. 36958 1

THE APPLICATION
The Project is a natural gas facility to be constructed adjacent to its existing Bennett
Mountain Power Plant in Mountain Home, Idaho. Application at 2-3. The Project was designed to
consist of nine natural gas fueled reciprocating engine units capable of providing up to 167
megawatts ("MW") of generation capacity. Id. at 3. The Company represented that the Project
would have operational flexibility to generate between 10 MW and 167 MW of electricity. Id. at
8.
The Project was selected through the Company's 2028 Request for Proposals ("RFP")bid
evaluation process, after the Oregon Public Utility Commission ("OPUC") determined that the
Company had conducted the procurement in a fair and competitive manner consistent with
applicable bidding rules. Id. at 6, see also OPUC Order No. 25-327, Docket UM 2317 (Aug. 30,
2025). After the Project was identified on the final shortlist for the 2029 bids, the Company
executed agreements related to the Project.Id. at 7-8. The Company asserted that the Project was
necessary to address anticipated capacity deficits on its system and represented that it was a cost-
effective means of ensuring adequate and reliable service to customers.Id. at 8.
The Company represented that it had incurred capital expenditures associated with the
Project due to industry demand for long-lead materials.Id. at 10. Specifically,the Company stated
that it was required to make a down payment in April 2025 to secure the purchase of the
reciprocating engine units for the Project. Id. at 10-11. The Company maintained that these
expenditures were necessary to help ensure the timely completion of the Project. Id. at 11.
The Company requested that the Commission confirm that it was appropriate to begin
accruing AFUDC once the Project was deemed viable and expenditures for resource procurement
had commenced, even if such costs were incurred prior to the granting of a CPCN. Id. The
Company stated that it would address cost recovery for the Project in a future filing with the
Commission. Id.
Finally, the Company represented that it intended to finance the Project through a
combination of available cash, operating cash flow, existing credit facilities, new borrowings and
debt issuances, and future equity contributions from its parent company, IDACORP.Id. at 12.
STAFF COMMENTS
Staff reviewed the Company's Application and supporting materials and recommended
that the Commission grant a CPCN for the Project. Staff Comments at 2. Staff believed that the
ORDER NO. 36958 2

Company demonstrated a need for additional system capacity to maintain reliability, that the
Project represented the least-cost and least-risk resource among viable alternatives, and that the
Company satisfied the applicable regulatory requirements for CPCN approval.Id. Although Staff
agreed the decision to proceed with the Project was prudent and recommended that final prudence
and cost recovery be evaluated in a future ratemaking proceeding based on the Project's actual
costs.Id. Staff further supported the accrual of AFUDC beginning with the initial procurement of
the engines for the Project but did not support granting blanket authorization for early AFUDC
accrual for unspecified future resource procurements.Id.
Staff identified that the Company planned to begin construction in the second quarter of
2026, following CPCN approval, with a commercial operation date of June 2028. Id. Staff noted
that the Project required gas supply upgrades, including improvements to the Northwest Williams
Pipeline gas tap and installation of a new site lateral connection and that the pipeline owner was
expected to complete the gas tap upgrade over an 18-month period, with overall gas supply
upgrades anticipated to be finished by early 2027. Id. at 2-3.
Staff agreed that the need for additional resources existed.Id. at 3. The Company identified
a 265 MW capacity deficit in 2028, and Staff s review reasoned that the shortfall could be greater,
particularly if any of nine other planned generation or transmission projects were delayed.Id. Staff
therefore agreed that additional cost-effective resources were necessary to ensure system
reliability.Id.
Staff believed that the Project qualified as a least-cost, least-risk resource based on the
integrity of the 2028 RFP process, the Project's cost performance, and its risk profile. Id. Staff
believed the RFP process to be fair and reasonable, noting the Independent Evaluator's
confirmation of the final shortlist and Staff s own review of the Company's levelized cost of
capacity calculations. Id. at 3-4. The Project ranked among the top-performing proposals in the
final shortlist and was the only dispatchable resource in its group, making it uniquely valuable in
portfolio modeling.Id. at 4. Staffs analysis outlined that portfolios excluding the Project resulted
in significantly higher net present value costs. Id. However, because the Project was a self-build,
traditional contractual cost containment protections were limited. Id. at 4-5. Accordingly, Staff
recommended that prudence of final construction costs be reviewed in a separate ratemaking case.
Id. at 5.
ORDER NO. 36958 3

Staff also concluded that the Project represented a least-risk resource.Id. The Project would
reduce the projected 2028 capacity deficit and provide greater reliability benefits in subsequent
years. Id. The Project could be placed in service more quickly than most alternative projects and
did not present material fuel supply or permitting risks. Id. at 6. The Company had secured
additional pipeline capacity under a long-term agreement and had obtained key local permits,
while other required permits were expected within timelines consistent with the Project schedule.
Id.
Staff further believed that the Company met the statutory and procedural requirements for
obtaining a CPCN, including demonstrating financial capability, good faith, and the necessity of
additional service.Id.
With respect to accounting treatment, Staff explained that AFUDC represented the
capitalized cost of funds used during construction and would become part of rate base once the
Project was placed in service.Id. at 7. The Company began accruing AFUDC in March 2025 upon
initiating procurement activities, including a down payment made before formal acknowledgment
of the resource by the OPUC. Id. Staff verified that early procurement was necessary to secure
equipment with appropriate lead times and found the requested AFUDC accrual for this Project to
be reasonable. Id.
However, Staff did not support the Company's request for blanket pre-approval of AFUDC
accrual for future projects at the time they were internally deemed viable. Id. Instead, Staff
recommended that, if similar circumstances arose in the future, the Company seek case-specific
approval for AFUDC accrual in the applicable CPCN proceeding.Id. at 8.
IIPA COMMENTS
IIPA recommended that the Commission deny or defer the Company's Application for a
CPCN for the Project and its request for an associated accounting order. IIPA Comments at 1.
Based on the record, IIPA concluded that the Company had not demonstrated a system capacity
need attributable to existing customers and therefore had not satisfied the statutory standard of
necessity required under Idaho Code §§ 61-501 through 61-503. Id. Using the Company's own
data, IIPA believed that removal of a single disclosed Additional Firm Load ("AFL") driver
converted the claimed 2028 capacity deficit into a surplus, undermining the assertion of system-
wide necessity.Id.
ORDER NO. 36958 4

IIPA believed that the Company's claimed 2028 capacity deficit was calculated using a
load forecast that embedded AFL(large,discrete industrial loads contractually distinct from legacy
customer classes) within the coincident peak demand forecast. Id. at 2-3. IIPA stated that the
Company did not provide a separate calculation of peak demand attributable solely to existing
customers and admitted in discovery that it had not evaluated system capacity absent AFL,
performed sensitivity analyses excluding AFL, or determined whether the alleged deficit would
exist without such load. Id. at 3. IIPA believed that although the Company did not conduct this
analysis, it produced sufficient data, including projected capacity positions, coincident peak
demand, and AFL contributions, to allow the calculation. Id. at 3-4. Because capacity position is
defined as available resources minus coincident peak load, removal of AFL from the forecast
mechanically reduced peak demand and eliminated the asserted deficit. Id. at 4. IIPA's
conservative reconstruction using the Company's own data demonstrated that the deficit did not
persist absent AFL.Id. The Company also failed to provide evidence that legacy customer classes
contributed materially to coincident peak growth or that the project was required to maintain
reliability for those customers.Id. at 5.
IIPA further believed that the Company failed to carry its burden of proof for issuance of
a CPCN. Id. at 6. The Company presented a single, assumption-driven capacity position without
performing the analyses necessary to establish that the alleged need existed independently of AFL
or was attributable to existing customers. Id. These omissions prevented the Commission from
making the findings required under Idaho law and precluded the determination that the proposed
facility was necessary to provide adequate, efficient,just, and reasonable service to the public.Id.
IIPA asserted that where an applicant declines to perform analyses necessary to demonstrate
necessity, the appropriate regulatory response is denial or deferral.Id.
IIPA also reasoned that granting the CPCN would improperly prejudge cost causation and
expose existing customers to unwarranted risk. Id. Much of the projected AFL was either
unconfirmed or undisclosed, and in certain instances, such as the proposed Diode Ventures
"Gemstone Technology Park" data center, no executed energy service agreement or binding
contractual safeguards existed to ensure that the developer or a future tenant would bear the
financial responsibility for the projected load.Id. at 6-7.In the absence of such commitments,costs
associated with generation and transmission investments sized to serve speculative load could be
shifted to existing customers if that load failed to materialize.Id. at 7.
ORDER NO. 36958 5

IIPA believed that because the Project is a long-lived,rate-based natural gas asset for which
the Company sought early accrual of AFUDC while disclaiming any current prudence
determination, approval of the CPCN would have begun locking in cost recovery and risk
allocation without a demonstrated system need. Id. IIPA concluded that such approval would
expose existing customers, including irrigation customers, to stranded-asset risk driven by
speculative and customer-specific load growth. Id.
Finally, IIPA argued that the Company's asserted urgency was self-created, assumption-
driven,and reversible.Id. at 8.The Company acknowledged that near-term capacity positions were
"very fluid" and subject to change as inputs and assumptions evolved. Id. The record showed that
the Company had recently accelerated, deferred, and withdrawn major resource decisions,
including the withdrawal of a previously approved CPCN for the Jackalope Wind Project.Id. The
Project itself had originally been contemplated for later needs and was accelerated based on revised
planning assumptions. Id. at 9. The Company did not model deferral scenarios, interim
alternatives, or revised assumptions to demonstrate that denial or deferral would jeopardize
reliability. Id. In light of the fluid and assumption-dependent nature of the asserted deficit, IIPA
concluded that deferral would preserve the Commission's ability to require a quantified showing
of system need attributable to existing customers, evaluate cost causation and risk allocation, and
avoid premature commitment to a long-lived, rate-based asset.Id.
PUBLIC COMMENTS
The Commission received two public comments. Both comments were in opposition to
granting the Company a CPCN for the Project and believed that the environmental costs and long-
term effects of global warming due to new or expanded fossil fuel burning energy outweighed the
minimal cost savings rate payers may expect if the Project were approved.
COMPANY REPLY
The Company stated that, to fulfill its statutory obligation to provide reliable,
nondiscriminatory service to all customers within its certificated territory, it was required to
procure additional resources to address identified capacity deficits. Company Reply at 5. In
February 2024, the Company initiated a competitive bidding process for its 2028 RFP and sought
OPUC approval of the Independent Evaluator, scoring and modeling methodologies, draft RFP,
and related procedural matters.Id. at 5-6. The OPUC approved these requests in April 2024.Id. at
6. Following evaluation of 83 proposals comprising 117 bids, the Company identified a final
ORDER NO. 36958 6

shortlist of 2029 projects, which the OPUC acknowledged in August 2025. Id. The Project was
selected as the most cost-effective resource to address the projected 2028-2029 capacity deficiency
period.Id.
The Company believed that Staff conducted a comprehensive review and concluded that
the RFP process was fair and reasonable, that sufficient competition existed, and that the
Company's modeling and cost analyses were appropriately performed. Id. at 6-7. Staff
independently verified that the Project was a least-cost, least-risk resource and the only
dispatchable option among the top-performing bids. Id. at 7. Staff further determined that the
projected capacity deficit in 2028 could be larger if planned resources were delayed and
recommended issuance of a CPCN and approval of AFUDC accrual beginning with initial
procurement activities.Id.
In response to objections from the IIPA, the Company maintained that its capacity need
satisfied the statutory standard of public convenience and necessity and that its obligation to serve
applied to all customers, including new large-load customers with executed agreements. Id. at 8-
9. The Company asserted that IIPA's recalculations and arguments were based on incorrect
assumptions and mischaracterizations of load forecasts and planning methodology.Id. at 9-11.The
Company explained that its capacity determinations were based on Loss of Load Expectation
modeling and reflected current assumptions at the time of procurement. Sensitivity analyses
demonstrated that system reliability would significantly worsen in 2028 without the Project.Id. at
12.
The Company also addressed alternatives,noting limited availability of incremental market
purchases and transmission capacity and minimal cost-effective demand response additions.Id. at
13. The Company projected the capacity deficit would grow from 2028 to 2030 and emphasized
that deferral was not feasible given multi-year development timelines.Id. at 16.
The Company requested approval of the CPCN, authorization to accrue AFUDC for the
Bennett project, and either approval or conditional treatment of AFUDC for future viable
procurements. It concluded that the evidentiary record demonstrated the Project was a prudent,
least-cost, least-risk resource necessary to maintain system reliability and meet its service
obligations.Id. at 20.
ORDER NO. 36958 7

PETITION FOR INTERVENOR FUNDING
IIPA requested the Commission grant Intervenor Funding in the amount of$9,442.20 for:
attorney fees incurred by E. Olsen, calculated for 3.1 hrs at $250/hr; paralegal fees, calculated for
5.9 hrs at$155/hr; soft costs of$8.70; and witness fees for D. Glosser and L. Kaufman, calculated
at 28.16 hrs at$275/hr.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501 through
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.
CPCN
The Company requests that the Commission grant a CPCN for the expansion of the existing
Benett Mountain Power Plant to include the addition of the Project. Before constructing a "line,
plant, or system," a public utility providing electrical service must obtain a CPCN from the
Commission establishing that the"public convenience and necessity"requires it.Idaho Code§ 61-
526. When analyzing the Application, the Commission considers, among other things: (1) the
Company's obligation to serve its customers' demand and whether the present or future public
convenience and necessity requires the additional resources or acquisition; (2)whether the Project
is a reasonable means of meeting the Company and public's needs; and (3) any investment that
may be required and its potential impact on rates.
Having reviewed the record in this case, the Commission finds that the Company has
satisfied the requirements to be granted a CPCN for the expansion of the existing Bennett
Mountain Power Plant to include the addition of the Project to meet the identified capacity
deficiency in 2028.
The Commission finds that the record reflects that the Company's system faces a capacity
deficit in 2028 and that additional cost-effective resources are necessary to ensure system
reliability. While the Commission recognizes the comments provided by IIPA, the Commission
believes the Company has presented sufficient information to support an identified capacity deficit
ORDER NO. 36958 8

in 2028.A review of the record also demonstrates that the Project is a least-cost,least-risk resource
and that the bidding and selection process for the 2028 RFP was fair and reasonable. Having
satisfied these requirements, the Commission finds the Company's request for a CPCN to expand
the existing Benett Mountain Power Plant to include the addition of the Project as a resource to
meet the Company's identified capacity deficiencies reasonable.
Rate Making Treatment
The Company does not request binding ratemaking treatment in this proceeding. The
Commission does not make any findings nor determination as to the prudence of any costs
associated with this Application or the expansion of the Bennett Mountain Power Plan;those issues
will be considered in the appropriate rate recovery proceeding. As stated in previous cases, the
Commission expects the Company to provide a full and transparent accounting for all costs
associated with the Project in any future proceeding where it seeks recovery.
Accrual of AFUDC
After reviewing the record, the Commission finds it reasonable to grant the Company's
request to begin accruing AFUDC for the Project commencing with the initial procurement
activities related to the reciprocating internal combustion engines.
The Commission acknowledges the Company's justification for seeking AFUDC accrual
prior to formal acknowledgement of the resource, given the equipment lead times and the need to
meet the identified capacity in-service date.However,the Commission does not find it appropriate
to authorize AFUDC accrual for expenditures associated with prospective resource procurements
solely on the basis that the Company considers a project a viable resource.
Requests for AFUDC accrual in advance of resource acknowledgement will be evaluated
on a case-by-case basis in future proceedings, consistent with the specific facts and circumstances
presented.
Intervenor Funding
Intervenor funding is available pursuant to Idaho Code § 61-617A and the Commission
Rules of Procedure 161-165.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
ORDER NO. 36958 9

a cumulative amount of intervenor funding not to exceed $40,000 for all intervening parties in a
single case.Idaho Code § 61-617A(2).
Commission 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 an Idaho nonprofit corporation representing farm interests in electric utility rate
matters in southern and central Idaho. IIPA relies solely upon dues and contributions voluntarily
paid by members,together with intervenor funding,to support its activities.Based upon our review
of IIPA's Petition, 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
$9,442.20. The award shall be chargeable to the irrigation class.Idaho Code § 61-617A(3).
That said, the Commission expects that future applications for intervenor funding will
include a detailed and transparent breakdown of the hours claimed and the specific tasks
performed. The Commission further notes that, while IIPA's participation in this proceeding was
of value, certain arguments presented here have also been raised by IIPA in other proceedings it
has sought intervenor funding. We do not suggest that the reuse or refinement of prior arguments
is inherently inappropriate—Consistency in regulatory positions can be constructive—however,
where material overlaps exist between proceedings, funding requests should clearly distinguish
new analysis from work that substantially relies on prior submissions. IIPA's requested funding in
current matters may very well take into account that the arguments presented in various cases are
duplicative, but we are unable to make that determination without a more detailed accounting.
ORDER NO. 36958 10

The Commission does not question the time and effort required to prepare informed and
meaningful contributions to the record.Nevertheless,we have a statutory obligation to ensure that
no customers are burdened with costs that are excessive, duplicative, or insufficiently justified.
Greater specificity and justification in future funding requests will assist the Commission in
fulfilling that responsibility while continuing to support effective public participation.
ORDER
IT IS HEREBY ORDERED that the Company's Application for a CPCN for the
Company's proposed expansion of the existing Bennett Mountain Power Plan to include the
addition of the Project, is approved.
IT IS FURTHER ORDERED that the Company's request for authorization to accrue
AFUDC for the Project upon initial procurement activities for the reciprocating internal
combustion engines, is approved.
IT IS FURTHER ORDERED that the Company's request for approval of the
commencement of the accrual of AFUDC on capital expenditures associated with future resource
procurements at the time the project is deemed viable by the Company, is denied, and instead will
be determined on a case-by-case basis where specific facts and circumstances can be evaluated.
IT IS FURTHER ORDERED that IIPA's petition for intervenor funding is granted in the
amount of$9,442.20. The award shall be chargeable to the irrigation class.
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 regarding 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.
ORDER NO. 36958 11

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this I Oth day of
March, 2026.
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I:\Legal\ELECTRIC\IPC-E-25-29_Bennett Gas CPCN\orders\IPCE2529_final_em.docx
ORDER NO. 36958 12