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HomeMy WebLinkAbout20260311Direct Richins - Redacted.pdf RECEIVED MARCH 11, 2026 IDAHO PUBLIC UTILITIES COMMISSION BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER ) COMPANY' S APPLICATION FOR ) CASE NO. IPC-E-26-04 CERTIFICATES OF PUBLIC ) CONVENIENCE AND NECESSITY FOR ) THE SOUTH HILLS AND PEREGRINE ) POWER PLANTS AND FOR AN ) ASSOCIATED ACCOUNTING ORDER. ) IDAHO POWER COMPANY DIRECT TESTIMONY OF ADAM RICHINS 1 Q. Please state your name, business address, and 2 present position with Idaho Power Company ("Idaho Power" or 3 "Company") . 4 A. My name is Adam Richins . My business address 5 is 1221 West Idaho Street, Boise, Idaho 83702 . I am 6 employed by Idaho Power as Executive Vice President and 7 Chief Operating Officer. 8 Q. Please describe your educational background. 9 A. I graduated from the University of Puget 10 Sound with a Bachelor of Science degree in Mathematics and 11 from Columbia University with a Bachelor of Science degree 12 in Civil Engineering, Magna Cum Laude. Thereafter, I earned 13 my law degree from the University of Washington with high 14 honors . In 2016, I graduated from Harvard Business School' s 15 Advanced Management Program. 16 Q. Please describe your work experience with 17 Idaho Power. 18 A. From 2010 to 2013 I was employed by Idaho 19 Power as Senior Counsel in the Legal Department. After that 20 role, I served as General Manager of Customer Operations 21 Engineering and Construction. In 2017, I was promoted to 22 Vice President of Customer Operations and Business 23 Development . In this role, I oversaw teams dedicated to 24 customer operations, customer satisfaction, and supporting 25 the Company' s brand. I was promoted to Senior Vice RICHINS, DI 2 Idaho Power Company 1 President and Chief Operating Officer of Idaho Power in 2 2019, which became Executive Vice President and Chief 3 Operating Officer in 2026, where I have responsibility over 4 operations departments that include Idaho Power' s 5 generation, transmission, and distribution resources; 6 customer operations; planning, engineering, and 7 construction; business innovation; information systems; 8 safety; environmental; and training. 9 Q. What is the Company' s request in this case? 10 A. Idaho Power is requesting the Idaho Public 11 Utilities Commission ("Commission") issue an order (1) 12 granting a Certificate of Public Convenience and Necessity 13 ("CPCN") for the South Hills Power Plant, a cost-effective 14 natural gas-fueled facility providing up to 222 megawatts 15 ("MW") of nameplate generation ("South Hills") to meet an 16 identified capacity deficit in 2029, (2) granting a CPCN 17 for the Peregrine Power Plant, a cost-effective natural 18 gas-fueled facility providing 430 MW of nameplate 19 generation ("Peregrine") to meet an identified capacity 20 deficit in 2030, and (3) confirmation of the Company' s 21 application of accrual of Allowance for Funds Used During 22 Construction ("AFUDC") for both the South Hills and the 23 Peregrine plants to coincide with initial procurement 24 activities for the natural gas-fueled facilities . The South 25 Hills and Peregrine plants are necessary for Idaho Power to RICHINS, DI 3 Idaho Power Company 1 continue to provide safe, reliable electric service in 2029 2 and beyond. 3 Q. What is the purpose of your testimony in 4 this matter? 5 A. The purpose of my testimony is to provide an 6 overview of Idaho Power' s resource procurement activities 7 and the current challenges of bringing resources online 8 timely as a result of the Company' s load growth across 9 multiple customer sectors at a time of rising costs, supply 10 chain constraints, permitting obstacles, and constrained 11 system capacity. I will discuss the timelines for 12 procurement activities associated with natural gas 13 resources that Idaho Power has been monitoring, ultimately 14 requiring the Company to take immediate action following 15 the identification of the South Hills and Peregrine natural 16 gas-fueled plants as least-cost, least-risk resources . 17 Finally, I will describe the natural gas transport and 18 supply landscape in Southern Idaho and the Company' s 19 efforts to secure additional incremental natural gas 20 transport capacity for the South Hills and Peregrine plants 21 as necessary for Idaho Power to continue to provide safe, 22 reliable electric service beginning in 2029 and beyond. 23 Q. Have you prepared any exhibits? 24 A. Yes . Exhibit No . 4 presents the Company' s 25 existing natural gas transport and storage map along the RICHINS, DI 4 Idaho Power Company 1 Northwest Pipeline. Confidential Exhibit No. 5 illustrates 2 the proposed route of the 3 I . RESOURCE PROCUREMENT ACTIVITIES 4 Q. What is driving Idaho Power' s continuous 5 resource procurement activities? 6 A. As described in the Direct Testimony of 7 Company Witnesses Mr. Jared Ellsworth and Mr. Eric Hackett, 8 the Company' s annual capacity positions developed to inform 9 the 2023 Integrated Resource Plan ("IRP") identified 10 incremental deficits in 2028 that continued to grow through 11 2038 . Despite considerable investment and expansion in 12 generation resources in recent years, Idaho Power' s system 13 today is fully utilized by current customers, and the 14 Company continues to experience sustained customer growth. 15 Idaho Power must ensure it has sufficient resources 16 to fulfill its obligation to reliably and safely serve 17 customers and therefore began the competitive solicitation 18 for the acquisition of resources, conducted through the 19 issuance of a Request for Proposals ("RFP") . The all-source 20 RFP sought proposals for a combination of capacity and 21 energy resources that provide a minimum of approximately 22 138 MW of incremental peak capacity and 555 MW of supply- 23 side resource additions in 2028 and beyond; specifically, 24 bids that could meet an April 1, 2028, commercial operation 25 date ("2028 Bids") and bids with a commercial operation RICHINS, DI 5 Idaho Power Company 1 date beyond April 1, 2028 ("2029 and Beyond Bids") . 2 Although Idaho Power has promptly initiated the competitive 3 solicitation process upon identification of the annual 4 capacity deficiencies, first in the 2021 IRP for 2023 5 through 2027 resources, and subsequently with the 2023 IRP 6 for 2028 and beyond resources, many of the resources 7 selected through the extensive process are not able to come 8 online as expected. 9 Q. What has been driving the delay in bringing 10 the new resources online? 11 A. The Company' s load growth across multiple 12 customer sectors, combined with rising costs, supply chain 13 constraints, permitting obstacles, and constrained system 14 capacity, is posing significant challenges for Idaho Power 15 and third-party developers in bringing resources online in 16 time to meet identified capacity deficiencies . More 17 recently, these challenges are exacerbated by the lack of 18 2029 and Beyond Bids received as well as the limited 19 diversity of dispatchable resources . 20 Q. Company Witness Mr. Hackett describes the 21 resources selected to meet the identified 2029 and 2030 22 capacity deficiencies as a result of the issuance of the 23 RFP. Did Idaho Power identify dispatchable resources that 24 can be brought online in time to meet the capacity 25 deficiencies? RICHINS, DI 6 Idaho Power Company 1 A. Yes . To meet the 2029 capacity deficit, Idaho 2 Power identified the South Hills natural gas-fueled plant, 3 the 2029 and Beyond Bid benchmark bid, originally named the 4 Milner project, as a least-cost, least-risk resource 5 alternative. Regarding the 2030 and beyond deficits, the 6 Company had already solicited bids for resources to come 7 online in 2029 and beyond and received no viable bids to 8 reasonably address the identified 2030 and beyond capacity 9 shortfalls . As a result, the Company was required to take 10 immediate action to evaluate the procurement of alternative 11 resources to fill the identified capacity deficiencies, 12 ultimately leading to the identification of the Peregrine 13 natural gas-fueled plant as a least-cost, least-risk 14 resource. Peregrine was necessary and required to timely 15 meet the Company' s resource needs and continue to provide 16 reliable and adequate service to Idaho Power' s customers . 17 Due to supply chain timelines, the Company was required to 18 financially commit to procure these two necessary, cost- 19 effective capacity resources prior to this CPCN request to 20 preserve an opportunity to have the resources online by the 21 required need dates . 22 II . NATURAL GAS RESOURCE PROCUREMENT 23 Q. What are current timelines for procurement 24 activities of natural gas resources that required the 25 Company to take immediate action? RICHINS, DI 7 Idaho Power Company 1 A. In April 2024, Idaho Power hired a consultant 2 to support a technical and commercial market review on 3 multiple types of gas generation technology. Following the 4 review, Idaho Power monitored lead times in the industry to 5 stay apprised on how manufacturing lead times were impacted 6 by externalities in the market for new gas generation 7 equipment. At the time, lead times as developed through the 8 market review were The timelines 10 significantly changed over the next year, when the Internal 11 Bid Team was developing its bid for the Bennett Gas 12 Expansion Project, due to an increased demand for 13 reciprocating engines and were extended by as many as 16 14 additional months to 15 As a result, the Company continued monitoring the 16 lead times with Wartsila, the engine supplier for the 17 Bennett Gas Expansion Project, to ensure viability for 18 South Hills . In November 2025, just five months after 19 securing reciprocating engines for the Bennett Gas 20 Expansion Project, Wartsila notified Idaho Power that the 21 existing lead times had increased to 30 months due to 22 demand for the engines . The rapid escalation in lead times 23 required the Company promptly secure slot reservations to 1 Idaho Power considers the technical and commercial market review data as proprietary information as the Company must compete with other bidders on projects. RICHINS, DI 8 Idaho Power Company 1 ensure delivery in time to meet the required June 1, 2029, 2 commercial operation date. Idaho Power secured reservation 3 slots for 12 reciprocating engines in December 2025 . All 4 reservation slots for 2029 commercial operation have been 5 filled and as discussed in Company Witness Mr. Hackett' s 6 testimony, all reservation slots for 2030 have been filled 7 as well . Idaho Power' s prudent actions have ensured the 8 Company will be able to bring a resource online in time for 9 a June 1, 2029, commercial operation date. 10 Q. Is there a high demand for natural gas 11 turbines as well, increasing the lead times associated with 12 Peregrine? 13 A. Yes . Due, in part, to the shift to more 14 dispatchable energy sources, increased demand for energy- 15 intensive data centers, increased demand for onshoring of 16 manufacturing, and the rise in electricity demand in 17 general across the world, the need for turbines has 18 increased significantly, which in turn negatively impacted 19 lead times . When Idaho Power began evaluating the potential 20 gas resources in early 2025, the Company was informed by 21 the three major natural gas turbine suppliers that there 22 were no combined cycle turbines available to meet a June 1, 23 2030, in-service date . Several large entities had bought 24 the remaining inventory. 25 Q. Were there simple cycle combustion turbines RICHINS, DI 9 Idaho Power Company 1 available? 2 A. In terms of simple cycle turbine technologies, 3 one of the three turbine manufacturers informed Idaho Power 4 that they no longer had a production slot available to 5 ensure a June 1, 2030, commercial operation date . The 6 Company was informed by the two remaining suppliers that 7 Idaho Power needed to move fast to secure a turbine 8 manufacturing slot necessary to meet a June 1, 2030, in- 9 service date. Subsequently, a second supplier informed 10 Idaho Power that they no longer had the turbine the Company 11 needed available to meet the necessary timeline . 12 As such, following a competitive solicitation 13 process, in May 2025, the Company executed a reservation 14 agreement with anticipated delivery of a turbine in 15 November 2028 . By the time the sales contract was executed 16 in December 2025, that delivery date had shifted to March 17 2029, resulting in a nearly four-year lead time for the 18 procurement of turbines . If Idaho Power had not secured the 19 reservation slot when it did, a turbine delivery in time to 20 meet a June 1, 2030, commercial operation date would not 21 have been possible. The Company' s diligent efforts 22 monitoring timelines in a very restrictive procurement 23 environment have resulted in the identification of two 24 least-cost, least-risk, natural gas-fueled resource 25 alternatives, South Hills and Peregrine, that are necessary RICHINS, DI 10 Idaho Power Company 1 to ensure Idaho Power can continue to provide safe, 2 reliable electric service beginning in 2029 and beyond. 3 III . GAS PIPELINE CAPACITY AND SUPPLY 4 Q. What is the natural gas transport and supply 5 landscape in Southern Idaho? 6 A. Currently, the Northwest Pipeline is the sole 7 provider of gas transport to Idaho. Owned by the Williams 8 Companies ("Williams") , the Northwest Pipeline is a 4, 000- 9 mile bi-directional natural gas transmission system 10 crossing the states of Washington, Oregon, Idaho, Wyoming, 11 Utah and Colorado. The Northwest Pipeline' s bi-directional 12 system provides access to British Columbia, Alberta, Rocky 13 Mountain and San Juan Basin gas supplies, which the Company 14 relies upon due to limited natural gas production within 15 the southern Idaho corridor. Right now, 100 percent of the 16 firm transport capacity is contracted for and there is no 17 firm delivery available to the southern Idaho corridor. 18 Q. How is gas supplied to fuel Idaho Power' s 19 existing natural gas power plants? 20 A. The Company is currently receiving fuel from 21 the Stanfield, Sumas, and Rockies market hubs . For the 22 Idaho gas facilities, approximately 80 percent of the 23 natural gas comes from the Stanfield hub and the remaining 24 approximately 20 percent comes from the Sumas market. Idaho 25 Power receives natural gas from the Rockies market hub to RICHINS, DI 11 Idaho Power Company 1 fuel the gas units at the Jim Bridger and North Valmy power 2 plants . In addition, the Company retains storage at Spire 3 and Jackson Prairie to balance the fueling of Idaho Power' s 4 natural gas facilities . Exhibit No. 4 to my testimony 5 presents the Company' s existing natural gas transport and 6 storage map along the Northwest Pipeline. 7 Q. Does Idaho Power have firm capacity on the 8 Northwest Pipeline? 9 A. Prior to 2024, Idaho Power relied on some non- 10 firm pipeline capacity on the Northwest Pipeline to serve 11 natural gas facilities . However, the western energy markets 12 are undergoing a paradigm shift resulting in increased 13 volatility in the natural gas market attributable to coal 14 to gas conversions, renewables penetration and increasing 15 power demand, driving an increase in demand for gas-fired 16 generationz resulting in a tightened gas transport market. 17 This, coupled with the Company' s increased use of natural 18 gas the past couple of years, led Idaho Power to secure 19 additional incremental firm capacity, purchasing the last 20 remaining firm capacity on the Williams Northwest Pipeline 21 in September 2024 to support hedging and operational 22 practices . 2 Williams Northwest Pipeline Shipper Advisory Board Meeting Fall 2025 RICHINS, DI 12 Idaho Power Company 1 Q. Will this existing capacity on the Williams 2 Northwest Pipeline provide enough capacity to fuel and 3 hedge the South Hills and Peregrine gas facilities? 4 A. Not at certain times of the year. With the 5 tightening of the gas transport market, and upon 6 investigation by the Internal Bid Team of potential natural 7 gas resource options for bidding into the 2028 RFP, Idaho 8 Power contacted Williams 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 RICHINS, DI 13 Idaho Power Company 1 Q. 2 3 A. 4 5 6 7 8 9 10 11 12 13 14 Q. What is an Open Season and Reverse Open 15 Season? 16 A. An Open Season is a procedure whereby Williams 17 announces to prospective shippers of the potential for new 18 primary firm transportation service under the proposed 19 project, the Rockies Columbia Connector project in this 20 case, soliciting interest in any portion of the new primary 21 firm transportation. A Reverse Open Season is a request by 22 Williams soliciting offers for the permanent relinquishment 23 of primary firm transportation service on the Northwest' s 24 system in connection with the project. Any interested 25 parties submit a Non-Binding Open Season Bid Sheet, or Non- RICHINS, DI 14 Idaho Power Company I Binding Reverse Open Season Bid Sheet, expressing interest 2 in or relinquishment of, firm transportation service . 3 After the close of the Open Season, all non-binding 4 bids are evaluated and aggregated, establishing the broader 5 market interest in order to right size the project, 6 ultimately determining whether binding precedent agreements 7 for the project should be executed. The total capacity 8 awarded after the Open Season and the associated pricing is 9 based on the facilities required to provide the requested 10 service and reflected in the binding precedent agreements . 11 Q. Has Williams initiated the Open Season and 12 Reverse Open Season for the Rockies Columbia Connector 13 project? 14 A. Yes . The Open Season and Reverse Open Season 15 for the Rockies Columbia Connector project commenced on 16 June 25, 2025, and ended August 6, 2025 . 17 Q. Did Idaho Power submit a Non-Binding Open 18 Season Bid Sheet for the Rockies Columbia Connector 19 project? 20 A. Yes . Recognizing the impact the recent 21 tightening of the gas transport market has had as well as 22 identification in the 2025 IRP Preferred Portfolio of the 23 need for an additional 450 MW of natural gas resources by 24 2030 and hedging requirement needs, the Company submitted a 25 Non-Binding Open Season Bid Sheet for up to - RICHINS, DI 15 Idaho Power Company 1 -. The bid sheet indicated a delivery preference for 2 3 Following the Open Season, Williams began 4 negotiating Precedent Agreements with each interested party 5 and anticipates finalizing the scope of the project based 6 on the Open Season commitments by April 2026 . 7 Q. 8 9 10 A. 11 12 13 14 15 16 17 18 19 20 Q. 21 22 23 24 A. 25 RICHINS, DI 16 Idaho Power Company 1 2 3 4 5 6 7 8 9 10 11 12 13 Idaho Power is taking timely and prudent actions 14 to secure gas transport upon recognition of the tightening 15 of the market positioned the Company to be able to procure 16 alternative, lower-cost resources to ensure Idaho Power can 17 continue to provide safe, reliable electric service 18 beginning in 2029 and beyond. 19 IV. CONCLUSION 20 Q. Please summarize your testimony. 21 A. Idaho Power has been facing challenges 22 bringing resources online timely as a result of the 23 Company' s historically high load growth across multiple 24 customer sectors at a time of rising costs, supply chain 25 constraints, permitting obstacles, and constrained system RICHINS, DI 17 Idaho Power Company 1 capacity. The current procurement environment is very 2 restrictive with timelines for procurement activities 3 associated with natural gas resources rapidly shifting, 4 requiring the Company to take immediate action to procure 5 reciprocating engines, a turbine, and firm gas 6 transportation service following the identification of 7 South Hills and Peregrine as least-cost, least-risk 8 resources, ensuring Idaho Power can continue to provide 9 safe, reliable electric service beginning in 2029 and 10 beyond. 11 Q. Does this conclude your testimony? 12 A. Yes . RICHINS, DI 18 Idaho Power Company 1 DECLARATION OF ADAM RICHINS 2 I, Adam Richins, declare under penalty of perjury 3 under the laws of the state of Idaho: 4 1 . My name is Adam Richins . I am employed by 5 Idaho Power Company as the Executive Vice President and 6 Chief Operating Officer. 7 2 . On behalf of Idaho Power, I present this 8 pre-filed direct testimony and Exhibit No. 4 and 9 Confidential Exhibit No. 5 in this matter. 10 3 . To the best of my knowledge, my pre-filed 11 direct testimony and exhibit are true and accurate . 12 I hereby declare that the above statement is true to 13 the best of my knowledge and belief, and that I understand 14 it is made for use as evidence before the Idaho Public 15 Utilities Commission and is subject to penalty for perjury. 16 SIGNED this loth day of March 2026, at Boise, Idaho. 17 / 18 19 Signed: 20 [NAME] 21 RICHINS, DI 19 Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-26-04 IDAHO POWER COMPANY RICHINS, DI TESTIMONY EXHIBIT NO. 4 Existing Natural Gas Transport and Storage Map •. Van ❑�� ! - NWP suwas j . NWP Aquifers a ! Plymouth LNG 3rd Party Gas Depleted sett O Market Hubs Jackson Prairie Storage GTN D Ruby Prairie Westcoast hMist Storage PaiutePipeline ^~ — Tuscarora �t ti n Stanfield to Langley/Bennett — WhlteRiverHub sal ��!• �' r _ 2 North Valmy 4. Bennett Mountain 2 Jim Bridger Surrfas to Elmore/Langley ; 1 � L� � Q Langley Gulch g o,se'•A 2 Danskin l7anskin (Elmore) i � B'e�nett ---� Existing Transport �A ••• ••► RCL-Nov 2025 •• Opal im Bridger Spire Stora 1 Rockies CF`.,. Valm •` Williams.Saltt"a `wty W RM W ite - River Hub Williams corporate Hdqrs Denver a t1 one WWlams Genter Tulsa,ON 74172 - � Phone:800-945-5426 User:sstember Date:8/9/2024 5auamento Exhibit No.4 Case No. IPC-E-26-04 Richins, IPC Page 1 of 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-26-04 IDAHO POWER COMPANY CONFIDENTIAL RICHINS, DI TESTIMONY EXHIBIT NO. 5