20260406Direct Wilding -REDACTED.pdf

RECEIVED
APRIL 6, 2026
IDAHO PUBLIC
UTILITIES COMMISSION
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) CASE NO. PAC-E-26-04
OF PACIFICORP D/B/A ROCKY )
MOUNTAIN POWER FOR APPROVAL OF ) DIRECT TESTIMONY OF
SALE OF WASHINGTON SERVICE AREA ) MICHAEL G. WILDING
AND ACCOUNTING ORDER )
REDACTED
ROCKY MOUNTAIN POWER
CASE NO. PAC-E-26-04
April 2026

1 I . INTRODUCTION AND QUALIFICATIONS
2 Q. Please state your name, business address , and present
3 position with PacifiCorp d/b/a Rocky Mountain Power.
4 A. My name is Michael G. Wilding, and I am the Vice
5 President of Energy Supply Management ("ESM") for
6 PacifiCorp. My business address is 825 Multnomah Street,
7 Suite 600, Portland, Oregon 97232 .
8 Q. Please describe your education and professional
9 experience.
10 A. I received a Master of Accounting from Weber State
11 University and a Bachelor of Science degree in
12 accounting from Utah State University. As Vice
13 President, ESM, my responsibilities include directing
14 PacifiCorp' s front office organization in commercial and
15 trading activities . ESM is responsible for PacifiCorp
16 load service and the generation dispatch, supplying
17 reserves for the balancing authority area ("BAA") , and
18 commercially managing PacifiCorp' s diverse generation
19 portfolio from real-time to three years out. This
20 includes resource adequacy, commercial transmission,
21 electric and natural gas hedging, term and day-ahead
22 trading, real-time trading, system balancing, and
23 organized market participation in the Western Energy
24 Imbalance Market and the Extended Day-Ahead Market
25 ("EDAM") . I am also responsible for PacifiCorp' s carbon
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1 policy and reporting group. Before assuming my current
2 position in February 2021, I worked on various
3 regulatory projects including general rate cases, the
4 multi-state process, and net power cost filings . I have
5 been employed by PacifiCorp since 2014 .
6 Q. Have you testified in previous regulatory proceedings?
7 A. Yes . I have previously testified in front of the Idaho
8 Public Utilities Commission ("Commission") , and in
9 California, Washington, Oregon, Utah and Wyoming. I have
10 also filed testimony at the Federal Energy Regulatory
11 Commission ("FERC") .
12 II . PURPOSE OF TESTIMONY
13 Q. What is the purpose of your testimony in this proceeding?
14 A. My testimony provides an overview of three exhibits to
15 the Asset Purchase and Service Area Transfer Agreement
16 (the "Agreement") between PacifiCorp and Gem Sub LLC
17 ("Gem") , an affiliate of Portland General Electric
18 Company. ' These exhibits include the Power Purchase
19 Agreement ("PPA") Term Sheet ("PPA Term Sheet") , 2
20 Electric Transmission Service and Interconnection Plan
21 Transmission Plan ("Transmission Plan") , and the
1 The Agreement is provided in Attachment No. 1 to the application.
2 The PPA Term Sheet is provided in Attachment No. 1 to the application.
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1 Balancing Authority Services Term Sheet (` BAA Term
2 Sheet") . 3
3 Q. Have the agreements contemplated by these term sheets
4 and plans been finalized?
5 A. No . But prior to closing, PacifiCorp and Gem will
6 negotiate in good faith and use reasonable best efforts
7 to prepare and finalize definitive agreements
8 contemplated by the term sheets and plans attached to
9 the Agreement as exhibits .
10 Q. Please provide a summary of your direct testimony.
11 A. In summary, I describe how the PPA Term Sheet, the
12 Transmission Plan, and the BAA Term Sheet support the
13 Agreement to create a smooth transfer of the service
14 area from PacifiCorp to Gem. The PPA Term Sheet is a
15 precursor to what will be the executed PPA between
16 PacifiCorp and Gem ("Bridge PPA") . The Bridge PPA
17 provides a prudent and necessary transitional mechanism
18 that ensures Washington customers remain in an
19 equivalent energy position during the period between the
20 transfer of assets under the Agreement and the full
21 development of Gem' s long-term resource portfolio . As
22 detailed in the PPA Term Sheet, the Bridge PPA provides
23 firm energy, reliable capacity, bundled renewable energy
3 The Transmission Plan, as well as the BAA Term Sheet. are provided in
Attachment No. 1 to the application.
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1 credits ("RECs") , and flexible term options to align
2 with project development timelines . I will also describe
3 the Transmission Plan and the BAA Term Sheet and explain
4 why both these exhibits are a necessary part of the
5 Agreement . Lastly, I present the resource adequacy
6 impact of the Agreement and the value it will provide to
7 the system before and after the anticipated Bridge PPA
8 and how PacifiCorp will continue to reliably serve load.
9 III . THE PPA TERM SHEET
10 Q. Why does the Agreement contemplate a Bridge PPA between
11 PacifiCorp and Gem?
12 A. The Agreement between PacifiCorp and Gem transfers
13 retail load located in Washington and select Washington-
14 based assets from PacifiCorp to Gem ("Service Area
15 Transfer") . The Service Area Transfer includes peak
16 retail load of approximately 800 megawatts ("MW") while
17 the dispatchable capacity contribution of the included
18 generation is approximately 500 MW. The transferred
19 generation assets alone do not provide the same overall
20 energy and capacity that Washington customers currently
21 receive through their allocation of PacifiCorp' s broader
22 system under the Washington 2026 Protocol . Because of
23 this difference, PacifiCorp agreed to provide Gem with
24 a Bridge PPA that allows Gem time to secure its own
25 supply, independent of PacifiCorp. The agreed upon
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1 commercial terms of that Bridge PPA are included in the
2 PPA Term Sheet .
3 Q. Why is the PPA Term Sheet an exhibit to the Agreement?
4 A. The PPA Term sheet is attached to the Agreement to
5 memorialize the agreed-to commercial terms of the
6 anticipated Bridge PPA. As I noted earlier, all terms
7 and conditions of the Bridge PPA are expected to be
8 finalized before the closing of the Service Area
9 Transfer.
10 Q. How does the Bridge PPA as considered in the PPA Term
11 Sheet support the Service Area Transfer between
12 PacifiCorp and Gem?
13 A. This PPA Term Sheet recognizes Washington' s energy
14 policy while allowing PacifiCorp' s remaining multi-state
15 portfolio to continue operating efficiently for
16 customers in those states . The PPA Term Sheet addresses
17 the difference between Gem' s energy-load position and
18 PacifiCorp' s current energy-load position for its
19 Washington customers over a transition period and Gem' s
20 need to have a comparable volume of bundled RECs to meet
21 its obligations under the Clean Energy Transformation
22 Act ("CETA") . Additionally, the Bridge PPA will support
23 the Service Area Transfer in several ways : (1) it is
24 simple to administer; (2) it includes both energy and
25 capacity in an integrated product; (3) it provides
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1 bundled RECs that support CETA compliance in Washington;
2 (4) it aligns with the available transmission and
3 operational framework; and (5)
4
5
6 Q. How does the PPA Term Sheet support the Agreement and
7 customers in all jurisdictions?
8 A. Washington customers retain a stable energy-load
9 position during the transition, while customers in
10 PacifiCorp' s remaining states realize a slight
11 improvement to the overall system capacity position.
12 Q. What is the duration of the Bridge PPA?
13 A. According to the PPA Term Sheet, the Bridge PPA begins
14 when the Agreement closes and continues for
15
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22
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1
2
3 Q. How are PacifiCorp' s remaining customers protected if
4 Gem chooses to exercise its extension option?
5 A. As I discuss further below,
6
7 before the end of the
8 Consequently, if Gem exercises
9 the extension option,
10 associated with the
11 Bridge PPA.
1 Q. What energy product does the Bridge PPA provide?
13 A. Under the PPA Term Sheet,
14
15
16
17
18
19 The energy delivered under the
20 Bridge PPA offsets the difference in energy from system
21 generation resources allocated to Washington under the
22 Washington 2026 Protocol and the resources conveyed
23 under the Agreement.
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1 Q. What is the basis for the difference in energy between
2 resources allocated to Washington under the Washington
3 2026 Protocol and the resources conveyed under the
4 Agreement?
5 A. The energy volume and shape is calculated from the
6 modeling used by PacifiCorp to support its 2026 Power
7 Cost Only Rate Case ("PCORC") before the Washington
8 Utilities and Transportation Commission ("Washington
9 Commission") , 4 with the goal of establishing a Bridge
10 PPA shape that is fair to both PacifiCorp customers and
11 future Gem customers .
12 Q. How did you calculate the energy volume and shape for
13 this PPA Term Sheet?
14 A. This was achieved by creating two subsets of energy
15 profiles : a PCORC energy profile and a Gem energy
16 profile . The PCORC energy profile was calculated by
17 multiplying each resource' s hourly generation profile by
18 the generation allocation factors under the 2026
19 Washington Protocol, which the Washington Commission
20 approved. The Gem energy profile was created by summing
21 the hourly generation profile of the assets conveyed in
22 the Agreement: Chehalis, Goodnoe Hills, and Marengo I
4 Wash. Utils. & Transp. Comm'n v. PacifiCorp dba Pac. Power & Light
Co., Washington Commission Docket No. UE-250224, Exh. MGW-1CT at 5-6
(Apr. 1, 2025) .
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1 and II . Both energy profiles are based on a 2026 test
2 period consistent with the test period used in the PCORC .
3 The hourly difference between the PCORC and Gem
4 energy profiles is the source for the 24-hour shape for
5 each month, which is calculated by averaging differences
6 in energy for each of the 24 hours of a day across each
7 month. This 12-month x 24-hour Bridge PPA shape
8 effectively captures the difference in average hourly
9 energy between the Washington 2026 Protocol and the
10 assets conveyed under the Agreement, so that the average
11 hourly energy profile for Washington customers and the
12 remaining five states is unchanged. On an annual basis,
13
14
15
16
17
18
19 that Gem selects . This means that for the
20
21
22
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1 Q. Why did you use the Washington 2026 Protocol to determine
2 the
3 A. The Washington 2026 Protocol was used because it is the
4 approved cost allocation methodology used to set rates
5 for PacifiCorp customers in Washington. The Washington
6 Commission approved the Washington 2026 Protocol as part
7 of the 2026 PCORC .
8 Q. What pricing framework applies and why is it appropriate
9 for the transition?
10 A.
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12
13
14
15
16
17 Q. What is the energy price?
18 A.
19
20
21
22
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1 Q. What is the capacity price?
2 A. The capacity component complements the energy deliveries
3 by committing reliable capacity during peak periods . ■
4
5
6 This capacity payment helps to offset the
7 difference in revenue requirement increase due to
8 reallocation of resources among the remaining five
9 states .
10
11
12
13
14 Q. Does the PPA Term Sheet include damages for non-
15 performance?
16 A.
17
18
19
20
21
22
23
24 ensures transparent and
25 fair compensation for energy damages .
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1 Q.
2
3
4 A. The energy and capacity are contingent upon the
5 availability of the
6
7
8
9
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13
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17
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20
21
22 Q. Does the PPA Term Sheet include RECs?
23 A. Yes . Under the PPA Term Sheet, PacifiCorp will deliver
24 bundled RECs
25
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1
2 The RECs are transferred
3 through the Western Renewable Energy Generation
4 Information System, and the agreement ensures exclusive
5 rights for Gem and prevents double counting.
6
7
8
9 Q. How did you determine the number of RECs to include in
10 the PPA Term Sheet?
11 A. Using the same methodology, described above, that was
12 used to determine the
13
14
15 This method is intended to keep both
16 Washington customers and Idaho customers whole during
17 the PPA compared to the RECs each state would be
18 allocated absent the Service Area Transfer.
19 IV. TRANSMISSION PLAN
20 Q. Why does the Agreement include a Transmission Plan?
21 A. The service area being transferred by PacifiCorp
22 generally consists of two load areas, Yakima and Walla
23 Walla. These loads are not directly connected to each
24 other. Today, PacifiCorp serves these loads using a
25 combination of transmission rights over PacifiCorp' s
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1 owned transmission system and third-party transmission
2 systems . Additionally, the generation included in the
3 Agreement is moved to load using a combination of
4 transmission rights . To facilitate the Service Area
5 Transfer and Gem' s future ability to serve load and move
6 the generation resources to load a Transmission Plan was
7 necessary.
8 Q. Please describe the Transmission Plan for the load and
9 generation resources included in the Agreement.
10 A. The Transmission Plan contemplates various types of
11 transmission that will be transferred as part of the
12 Agreement . First, there are certain Bonneville Power
13 Administration ("BPA") transmission rights currently
14 held by PacifiCorp to bring Chehalis and Goodnoe Hills
15 generation to load, and additional BPA transmission
16 rights to serve load within the Yakima load area.
17 PacifiCorp has agreed to work with Gem and BPA to
18 transfer these BPA transmission rights to Gem.
19 Second, Gem will receive transmission rights on
20 PacifiCorp' s transmission system. This includes
21 transmission rights from Mid-Columbia ("Mid-C") -to-
22 Walla Walla and temporary transmission rights between
23 Walla Walla and Wallula while that line is being
24 upgraded.
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1 Third, certain PacifiCorp-owned transmission
2 assets are included in the Agreement and ownership will
3 transfer to Gem. This includes transmission assets from
4 Mid-C-to-Yakima and transmission assets to move Marengo
5 I and II to load. Additionally, Gem will receive a
6 partial ownership interest in the McNary-to-Wallula
7 line .
8 Q. What does the Walla Walla upgrade entail and what are
9 its customer benefits?
10 A. The Walla Walla upgrade strengthens the Walla Walla-to-
11 Wallula transmission line and associated substations,
12 increasing transfer capability across a key corridor.
13 The Walla Walla upgrade is needed to improve
14 reliability, reduce congestion, and strengthen the
15 transmission backbone to improve future operations and
16 enable future projects .
17 Q. Was PacifiCorp planning the Walla Walla upgrade before
18 the Agreement?
19 A. Yes . The Walla Walla upgrade was planned for future
20 development in the area. While transmission and
21 construction studies still need to be completed, it is
22 anticipated that the Walla Walla upgrade will double the
23 transmission capacity and provide both PacifiCorp and
24 Gem with sufficient transmission rights in the area.
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1 Q. How are responsibilities and costs for the Walla Wall
2 upgrade structured?
3 A. PacifiCorp and Gem will share funding and ownership
4 equally and will execute joint agreements that set roles
5 for construction, operation, and maintenance . Charges
6 are at cost without markup, and the agreements will be
7 filed with FERC, providing transparency and
8 accountability.
9 V. BAA TERM SHEET
10 Q. Why does the Agreement include a BAA Term Sheet?
11 A. The BAA Term Sheet provides sufficient runway for the
12 Gem to transition from PACW BAA while the service area
13 remains in the PACW BAA.
14 Q. What is the term of the BAA Term Sheet?
15 A. PacifiCorp and Gem expect the Balancing Authority
16 Services Agreement contemplated in the BAA Term Sheet to
17 last about three years beginning at closing, with Gem
18 having the right to terminate once Gem' s BAA transition
19 is complete . As necessary, the term will be extended on
20 a year-to-year basis or until Gem can transition out of
21 PacifiCorp' s BAA. This flexibility ensures a smooth and
22 reliable transition to the new owner.
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1 Q. What balancing authority services will PacifiCorp
2 provide?
3 A. Services include the full suite of ancillary services
4 (regulation, imbalance energy, frequency response, and
5 operating reserves) per PacifiCorp' s open access
6 transmission tariff ("OATT") . Gem may choose to self-
7 supply some of these services as permitted by
8 PacifiCorp' s OATT as new resources are brought online,
9 or with resources conveyed in the Agreement, like
10 Chehalis . Additionally, the BAA Term Sheet contemplates
11 the potential for Gem to purchase from PacifiCorp
12 additional services such as real-time operational and
13 dispatch control, settlement of deviations, compliance
14 with FERC and North American Electric Reliability
15 Corporation reliability standards applicable to the BAA
16 operator, and EDAM entity functions .
17 VI . RESOURCE ADEQUACY IMPACTS ASSOCIATED WITH THE BRIDGE
18 PPA
19 Q. Did you evaluate the resource adequacy impact of the
20 Service Area Transfer, including the impacts of the
21 Bridge PPA?
22 A. Yes . I used the Western Resource Adequacy Program
23 ("WRAP") methodology to evaluate the resource adequacy
24 of the system before and after the Service Area Transfer.
25 I chose the WRAP methodology because it is an established
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1 resource adequacy methodology in the West, and while
2 PacifiCorp is not planning on becoming a binding
3 participant, PacifiCorp is a participant until October
4 2027 . In this analysis, I first evaluated the resource
5 adequacy position of the six-state system position prior
6 to the Agreement, using a 2027 load forecast plus the
7 WRAP Planning Reserve Margin ("PRM") . Then I removed the
8 assets conveyed in the Agreement, added the Bridge PPA
9 as characterized in the PPA Term Sheet, and removed the
10 Washington load to establish a resource adequacy
11 position for the five states after the Agreement .
12 Q. Did you evaluate the impacts of resource adequacy for
13 the period when the Agreement closes and the Bridge PPA
14 becomes effective?
15 A. To evaluate the resource adequacy impacts of the
16 Agreement, I examined the change in resource adequacy by
17 resource type for the five-state system, shown in
18 Confidential Figure 1 . The five-state net resource
19 adequacy change is positive after the Agreement because
20 the obligation of Washington load plus the PRM is
21 removed, which is greater than the PPA obligation and
22 the capacity contribution of the generation assets
23 included in the Agreement . The Washington load plus PRM
24 obligation is between 704 MW to 961 MW, depending on the
25 month, and is reflected as a positive value in the
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1 figure, indicating a positive effect on the resource
2 adequacy position of the five states . The capacity
3 contributions from generation resources and the PPA are
4 reflected as negative values in the figure, indicating
5 a negative effect on the resource adequacy position of
6 the five states . The negative capacity credit from the
7 Bridge PPA ranges from roughly
8 . After netting the positive
9 and negative changes in capacity and obligation, the
10 overall resource adequacy benefit for the five-state
11 system is on average
12 ■
13 Confidential Figure 1 : Resource Adequacy Change After
14
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1 Q. How will the resource adequacy position change after the
2 Bridge PPA term expires?
3 A. To evaluate the resource adequacy after the term of the
4 Bridge PPA expires, I use the same data as above but
5 remove the Bridge PPA obligation. After the term of the
6 Bridge PPA expires, the resource adequacy position
7 improves further, because the five-state system will
8 continue to receive the benefit of a reduced system load
9 obligation, without the obligation to serve the Bridge
10 PPA. Confidential Figure 2 shows the change in resource
11 adequacy for the five-state system after the term of the
12 Bridge PPA expires . The resource adequacy position for
13 the five states improves
14
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1 Confidential Figure 2 : Resource Adequacy change after
2 the Service Area Transfer and Bridge PPA term.
3 Q. Is the increased length to the system simply a result of
4 a reallocation of generation resources due to Washington
5 using a different cost allocation methodology?
6 A. No . The above analysis does not consider cost
7 allocation. In other words, this is true length that is
8 being added to the system by transfering more load than
9 generation as part of the Service Area Transfer.
10 Q. What is the value of the resource adequacy benefit to
11 Idaho customers after the Service Area Transfer?
12 A. The annual resource adequacy or capacity benefit of the
13 system length created by the Service Area Transfer is
14 approximately
15
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1 _. On an Idaho-allocated basis, 5 this results in
2 an annual benefit of
3
4 Q. Please explain your calculation of the annual resource
5 adequacy benefit.
6 A. The Service Area Transfer immediately results in _
7 ■ M
8 . -, deferring need for
9 additional firm capacity resources . After the term of
10 the PPA expires,
11 To calculate the
12 capacity value of the additional system length I used
13 the cost of a battery with a capacity contribution value
14 of 85 . 10 percent. 6 The new system length of
15 , is the equivalent to energy
16 storage resource capacity of 7 To value
17 this length I used an estimated price of a utility scale
18 battery of , adjusted for an estimated
19 energy arbitrage value of 8 The annual
s Assumes total system benefit is allocated to each state as part of a
five-state system under the 2020 Protocol.
6 Consistent with WRAP established qualifying capacity contribution for
en
7
e ion and 85 percent
round-trip efficiency, calculated based on forecasted hourly Mid-Columbia
market prices. Because actual operations do not allow for perfect
foresight, the battery is assumed to charge when an hour has projected
prices that are among the six lowest in a given day, while the battery
discharges when an hour is among the six highest prices. In addition, a
minimum state of charge is maintained to provide flexibility and allow
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1 resource adequacy or capacity benefit is estimated by
2 multiplying the new system length by the cost of the
3 battery less the energy arbitrage value. 9 This is done
4
5
6 VII . RELIABILITY IN THE PACW BAA ASSOCIATED WITH THE
7 AGREEMENT
8 Q. How will the Bridge PPA affect reliability in the PACW
9 BAA?
10 A. When the Service Area Transfer closes, PacifiCorp will
11 no longer be able to rely on reserve capacity from the
12 Chehalis natural gas plant. However, there are several
13 factors that support continued reliable operations in
14 PACW despite the loss of Chehalis .
15 1 . Lewis River hydro and Mid-Columbia Grant County
16 hydro
17 The existing hydroelectric resources in PACW are
18 largely unaffected by the Agreement . These resources are
19 the primary source of reserves for system regulation in
20 PACW. These resources respond very quickly when needed,
the battery to contribute to operating reserve requirements until the
ne
9
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1 and at most times of the year are the most economical
2 resources to provide reserves in PACW.
3 2. Dynamic transmission capacity between PACE and PACW
4 PacifiCorp' s interconnected transmission system
5 between its two BAAs is not impacted by the Agreement .
6 This transmission connectivity allows PacifiCorp to hold
7 operating reserves for PACW in the PACE BAA, and transfer
8 energy in real-time as needed to support reliability in
9 PACW. This co-optimization between the two BAAs leads to
10 lower overall system costs as PacifiCorp can hold
11 reserves where it is most economical . After the term of
12 the Bridge PPA, the reduction in energy needs will free
13 up transmission connectivity for optimization between
14 the remaining five states to economically serve load
15 between PACE and PACW.
16 3. Hermiston
17 The Hermiston natural gas plant will play a
18 critical role by providing reserve capacity that may
19 otherwise have been held on Chehalis .
20 VIII . CONCLUSION
21 Q. What is your recommendation for the Commission?
22 A. I recommend the Commission approve the Service Area
23 Transfer because the PPA Term Sheet, Transmission Plan,
24 and BAA Term Sheet collectively ensure PacifiCorp' s
25 remaining customers are held harmless while also
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1 ensuring a smooth transition from PacifiCorp to Gem for
2 Washington customers .
3 Q. Does this conclude your direct testimony?
4 A. Yes .
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