20260409Reply Comments - Redacted.pdf

_ ROCKY MOUNTAIN 1407 W.North Temple,Suite 330
POWER. Salt Lake City,UT 84116
A DIVISION OF PACIFICORP
April 9, 2026 RECEIVED
April 09, 2026
VIA ELECTRONIC FILING IDAHO PUBLIC
UTILITIES COMMISSION
Commission Secretary
Idaho Public Utilities Commission
11331 W Chinden Blvd
Building 8 Suite 201A
Boise, Idaho 83714
RE: CASE NO. PAC-E-25-20
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
FOR A WAIVER OF THE SOLICITATION REQUIREMENTS PROPOSED IN
CASE NO. GNR-E-25-01
Attention: Commission Secretary
Pursuant to Commission Order No. 36907 — Notice of Application and Notice of Modified
Procedure, issued January 15, 2026, in the above referenced matter, PacifiCorp submits reply
comments to written comments filed by Commission Staff and a member of the public.
Informal inquiries may be directed to Jana Saba, Director of Regulation, at(801) 220-2823.
Sincerely,
Joelle Steward
Senior Vice President, Regulation
Enclosures

Joe Dallas (ISB# 10330)
Tiffanie A. Ellis-Burke
825 NE Multnomah, Suite 2000
Portland, OR 97232
Telephone: [phone]
Email: joseph.dallas(d),pacificorp.com
Tiffanie.ellis-burke(kpacificorp.com
Attorneys for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER FOR A PACIFICORP'S COMMENTS IN
WAIVER OF THE SOLICITATION RESPONSE TO COMMISSION
REQUIREMENTS PROPOSED IN CASE STAFF AND RUVEON, LLC
NO. GNR-E-25-01
PacifiCorp d/b/a Rocky Mountain Power ("PacifiCorp" or the "Company") submitted an
application to the Idaho Public Utilities Commission ("Commission") requesting approval of its
Water Use and Conveyance Agreement and a waiver of the solicitation requirements set forth in
Commission Staff Case No. GNR-E-25-01. Commission Staff ("Staff') and Ruveon, LLC, an
affiliate of Bayer Corporation ("Bayer") filed comments on the application. PacifiCorp
respectfully submits the following comments in response.
I. INTRODUCTION
PacifiCorp entered into a Power Purchase Agreement ("PPA") with US SFR LLC ("US
SFR"), a subsidiary of TerraPower, for the purchase of energy generated by the Kemmerer Unit 1
("KUI") nuclear demonstration project located in Kemmerer, Wyoming. In parallel, PacifiCorp
and US SFR executed a Water Use and Conveyance Agreement ("Water Use Agreement")
providing for the delivery of water required for the operation of the KUI project.1
The KUI project consists of a 345-megawatt ("MW") sodium-cooled fast reactor
integrated with a molten salt energy storage system, sited in proximity to PacifiCorp's existing
Naughton Generation Plant and associated interconnection infrastructure in Kemmerer,Wyoming.
Although the nuclear island supports a 345 MW output, the integrated storage system affords
1 Because the water resource is not located within Idaho,the Company is not required to seek Commission approval
of its disposition.
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operational flexibility, enabling output between 100 and 500 MW for durations of up to 5.5 hours.
To secure the offtake from this resource, PacifiCorp negotiated both the PPA and the Water Use
Agreement with US SFR.
PacifiCorp appreciates Staff's careful review and analysis of its request for a waiver.
Generally,PacifiCorp supports Staff's recommendations. Specifically,PacifiCorp appreciates that
Staff recommends approval of the waiver, and PacifiCorp is willing to provide the status updates
requested in Recommendation 3. However, the Commission should not impose the condition that
Staff recommended in Recommendation 2 for the Company to file a prudence review application
as close to the commercial operation date ("COD") as possible. It is not legally required that
PacifiCorp seek a prudence review for the PPA prior to project operations. Indeed, in Order
No. 26898, the Commission recently approved procedures for soliciting large supply-side
resources. In those procedures,the Commission expressly provides that,to the contrary,it is within
the Company's discretion whether to seek prudence review and approval prior to project
operations.2 These procedures were developed through a collaborative process in which multiple
parties and utilities participated, and the Commission should decline to revisit or rewrite these
established procedures in this proceeding. This is especially true here where there is no legal or
policy justification to do so. Instead, PacifiCorp offers an alternative solution to address Staff's
concerns over having adequate time to conduct a prudence review in a future proceeding.
II. RESPONSE TO STAFF'S COMMENTS
In comments, Staff discusses potential risks of the KU1 and discusses how the PPA
mitigates each risk. Staff's overall conclusion is that the "proposed PPA helps meet an ongoing
need for new resources, is economically favorable, and establishes and important path to
incorporate nuclear baseload resource into the Company's overall system."3 The Company agrees
with Staff's contentions related to risk mitigation in the PPA and highlights the following key
points.
With respect to cost-overrun risks, the Company agrees with Staff that the PPA structure
appropriately allocates development-cost exposure to U.S. SFR and TerraPower, rather than to
Idaho customers.
To the extent Staff's discussion may imply uncertainty
regarding these protections, PacifiCorp emphasizes that the PPA
2 In the Matter of Commission Staff s Application for Approval of an Oversight Process for the Acquisition of Large
Supply-Side Resources, Case No.GNR-E-25-01,Order No.36898(Jan.2,2026)("[T]he Company may file for
review of the final resource selection and determination of decisional prudence.")(emphasis in original).
3 In The Matter of The Application of Rocky Mountain Power for a Waiver of The Solicitation Requirements
Proposed in Case No. GNR-E-25-01,Case No.PAC-E-25-20,Confidential Comments of Commission Staff at 3
(Mar. 19,2026)(hereinafter,"Staff Comments").
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REDACTED
Regarding schedule-delay risks, the Company concurs with Staff's conclusion that
continued operation of the Naughton units provides a reliable backstop should the KU1 project
experience delays. The PPA includes defined COD requirements and
Moreover, because the KU1 resource is being treated as surplus relative to the Naughton
interconnection limit, any delay does not jeopardize system reliability or result in incremental
customer costs. PacifiCorp therefore believes that Staff appropriately recognizes the limited
operational risk posed by timing uncertainties and the protections already embedded in the PPA.
PacifiCorp also agrees with Staff's assessment of nuclear-incident risks but offers
clarification to ensure the record is complete. The project will be subject to comprehensive NRC
licensing, oversight, and inspection processes throughout construction and operation.
Contractually, the Company is not the owner or operator of the facility and has included
These features collectively ensure that nuclear-incident risk to Idaho customers is remote
and well-managed.
With respect to interconnection risks, the Company affirms Staff's recognition that U.S.
SFR
M. Although the Naughton substation will be modified to accommodate KU1, the throughput
limit at Naughton will remain unchanged, and operational control of the interconnection facilities
will remain with the Company.
Finally, the Company acknowledges Staff's discussion of water-resource risks associated
with the shared use of the Viva Naughton reservoir.While reservoir hydrology varies with seasonal
conditions, the Water Use Agreement contains provisions governing allocation and operational
coordination during dry-year conditions. Although Staff correctly notes that hydrological
uncertainty cannot be entirely eliminated, the Company believes that the Water Use Agreement's
framework, combined with its ability to adjust operations between Naughton and KU1, provides
reasonable mitigation. Given the magnitude of the long-term system benefits associated with a
reliable, carbon-free resource, the Company submits that the remaining water-resource risks are
manageable and do not outweigh the advantages of proceeding with the PPA and the Water Use
Agreement.
III. RESPONSE TO STAFF'S RECOMMENDATIONS
A. Recommendation to Grant Request for Proposal("RFP")Waiver
The Company supports Staff's recommendation that the Commission grant a waiver from
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the standard RFP process. As Staff recognizes, the KU1 project constitutes precisely the type of
unique, time-sensitive opportunity contemplated under Section 2.c of the RFP Procedure. The
combination of federal funding structures, the singular characteristics of the Natrium technology,
and the site-specific advantages associated with co-location at Naughton makes a competitive
solicitation impracticable and counterproductive. Granting the waiver is therefore consistent with
both Commission precedent and the intent of the RFP framework.
B. Recommendation for Separate Prudence Case
Staff notes that the Company is not seeking a prudence determination in this proceeding
and that the prudence review of the PPA would typically be in a future energy cost adjustment
mechanism ("ECAM") or general rate case ("GRC"). Given the unique nature of the PPA, Staff
requests that the Commission require the Company to file for prudence review in a separate
proceeding as close to the COD as possible to facilitate a detailed assessment. For reasons
discussed below, PacifiCorp believes a separate filing for this PPA is unnecessary.
As an initial concern, Staff's recommendation for a prudence review to take place closer
but prior to the COD seems to suggest that Staff believes the prudence review would be conducted
with updated financial and economic modeling information.4 To the extent this is what Staff is
implying,the Company wishes to clarify that prudence reviews should be conducted by examining
the information and assumptions reasonably available to the utility at the time the decision was
made.5 For this resource, the Company had a time-limited opportunity to enter into the PPA using
the available information at the time, and conducting the prudence review several years later
immediately prior to COD would not mean that prudence would be assessed using more current
information.
Accordingly, any basis for deferring prudence review until additional information becomes
available during project development is misplaced.Any future information regarding construction
progress, commercial operation, or other post-execution developments cannot retroactively affect
whether PacifiCorp acted prudently when it executed the PPA. Thus, conditioning approval on a
future prudence determination is inconsistent with both the temporal nature of prudence review
4 Staff Comments at 9.
5 See e.g.,In Re Avista Corp.,Case No.AVU-E-02-6,2002 WL 31618893 (Oct. 11,2002)("In assessing the
reasonableness of the Company's deferred costs we consider whether the Company's decisions based on the
information available at the time were reasonable when made and whether the Company's attempts to control its
costs were prudent.")(emphasis added);In the Matter of the Application of Idaho Power Company for an
Accounting Order, Case No.IPC-EO-114,Order No.28878(October 16,2001)("The Commission finds that at the
time the Company made the decision to lease,it was a prudent means of securing supply in a volatile market.")
(emphasis added);In re Idaho Power Co., et al,76 RU.R.4th 326(July 11, 1986)("This Commission's 1979 Order
authorizing construction of the two Valmy plants is said to be conclusive proof that the decision to construct Valmy
II was reasonable when made,and it would be unconscionable for the Commission to disavow its previous
determination and penalize the Company's shareholders solely because hindsight now reveals that the projected need
for Valmy II has not materialized as expected.")(emphasis added).
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and regulatory principles. For these reasons, it is inappropriate to impose a requirement for a
subsequent prudence determination of the PPA based on future information received.
Moreover, the plain language of the recently adopted procedures for soliciting large
supply-side resources expressly provides that, when no certificate of public convenience and
necessity ("CPCN") is required—as is the case here, the utility has discretion to seek a prudence
determination outside of its normal rate recovery proceeding, or alternatively, to defer prudence
review and recovery until its next rate case:
b. If a CPCN is not required, the Company may file an application for
review of the final resource selection and determination of decisional
prudence.
c. Alternatively, the Company may wait until its next rate case before
filing for prudence and recovery.[6]
While PacifiCorp supported the adoption of these procedures, it did so on the understanding that
the decision whether to seek prudence preapproval would remain within the utility's discretion.
The procedures unambiguously provide the utility with the option either to seek prudence
preapproval or to wait until its next rate case. PacifiCorp should be afforded that discretion, and a
requirement for preapproval should not be imposed in this proceeding.Moreover,the PPA includes
commercially reasonable protections that mitigate risk and safeguard against imprudent outcomes,
further addressing Staff's stated concerns.
However, the Company recognizes Staff's interest in ensuring transparency and
understands that prudence review of the PPA will occur through the ECAM or GRC which may
involve an expedited timeline for review.In an effort to address Staff's concerns without conceding
the necessity or appropriateness of a separate prudence determination, the Company offers an
alternative solution. The Company is willing to provide the following information 90 days in
advance of the next ECAM or GRC filing following commercial operation to allow for more time
to consider the prudence of the PPA within the course of that proceeding:
I. All documents and presentations that were provided to management, senior
management and the Board of Directors of the utility and its affiliates related to the
plant addition.
2. Details of the PPA resource including its location, capacity, technologies used,
project milestones or progress dates, and projected in-service date.
3. Description of any changes, modifications, etc. to the existing utility plant/system
that may be necessary to integrate the resource with the utility's system.
6 In the Matter of Commission Staff s Application for Approval of an Oversight Process for the Acquisition of Large
Supply-Side Resources, Case No.GNR-E-25-01,Order No.36898(Jan.2,2026)(emphasis in original).Furthermore,
the procedures specific to waivers only contemplate"Commission review and approval of the proposed opportunity."
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4. Information establishing the prudence of the Company's decision to execute the
PPA.
5. Information establishing how the PPA aligns with the Integrated Resource Plan and
its Action Plan.
6. Copies of the PPA, including any amendments or associated contracts.
7. Information within the Company's possession regarding all clearances, permits or
other government regulatory authorizations necessary, to be modified and
completed for the resource.
8. Information on whether there are any integration costs or fees (transmission, etc.).
9. The impacts of the resource on any utility power cost and production cost dispatch
models.If any models are revised to accommodate the resource,the revised models
will be available to the parties participating in the application proceeding.
This approach preserves the integrity of the prudence standard, respects the Company's statutory
discretion, and affords Staff a meaningful opportunity to review the PPA well in advance of the
formal filing where the prudence review would occur for ratemaking.
C. Recommendation for Investment Resource Plan ("IRP") Status Updates
The Company does not oppose Staff's recommendation to provide KU1 status updates in
future IRPs. Integrating KUl progress updates into the IRP cycle is a reasonable and efficient
means of ensuring the Commission and stakeholders remain informed as the project advances.
IV. RESPONSE TO BAYER'S COMMENTS AND RECOMMENDATION
In comments, Bayer states it "does not object to the Commission granting a limited, one-
time waiver of the solicitation requirements in this proceeding,given the unique and time sensitive
circumstances associated with the KU1 project."7 Bayer cautions that federal funding should not
be a substitute for a least-cost showing or limit the Commission's ability to conduct a prudence
review in a future proceeding. Bayer also requests the Commission clarify that the waiver does not
alleviate the Company from demonstrating the prudence of the resource in a subsequent
proceeding.
In response to Bayer, the Company reiterates that it recognizes that Commission approval
of the waiver requested in this proceeding does not constitute a prudence determination.
7 Bayer comments at 1.
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V. OTHER JURISDICTIONS PROCEEDINGS
Finally, PacifiCorp updates the Commission on its proceedings in other jurisdictions.
California — Water Rights Disposition Approval — This proceeding is pending a scoping
memorandum, but there have been no intervenors or protests.
Oregon — Waiver of Solicitation Process and Approval of Water Rights Disposition:
Commission Staff comments supported approval of all requests from the Company's application.
Utah— Waiver, Approval of Significant Energy Resource Decision, and Acknowledgement
of Property Disposition: A settlement stipulation supporting the Company's Utah application and
all requests therein was entered into by relevant parties including the Utah Public Service
Commission Staff, the Division of Public Utilities, and the Western Resource Advocates. The
remaining parties to the proceeding did not object to the stipulation. A hearing was held on this
stipulation, and the Company is expecting an order soon.
Wyoming— Water Right Disposition Approval:Approval granted.
Wyoming — Waiver of Solicitation Requirement: Wyoming Public Service Commission
voted to approve the application at its open meeting on April 7, 2026.
VI. CONCLUSION
Staffs Recommendations 1 and 3 should be adopted. PacifiCorp supports approval of
the requested waiver from the solicitation requirements and agrees to provide the additional
documentation identified by Staff. However, the Commission should reject Staffs
recommendation to require a separate prudence determination prior to commercial
operation of the KU1 project. Such a requirement is neither legally required nor consistent with
the settled prudence standard, which evaluates the Company's decision based on the information
available at the time the PPA was executed. Prudence review appropriately will occur through the
ECAM or GRC, and the Company's voluntary advance submission of materials provides Staff
with ample opportunity for review without imposing an extra-statutory condition.
The KUI PPA represents a unique, time-sensitive, and beneficial opportunity for
Idaho customers. The KU1 project is supported by federal funding, employs a first-of-its-kind
nuclear technology,and leverages significant site-specific advantages at the Naughton facility.The
PPA and related Water Use Agreement appropriately allocate development, cost, operational,
interconnection, and nuclear-related risks to the developer,while insulating Idaho customers from
cost overruns, reliability impacts, and extraordinary liabilities. Given these protections and the
potential long-term value of this carbon-free resource,the transaction offers substantial system and
customer benefits that could not be replicated through a competitive solicitation.Accordingly,the
Commission should grant the requested relief.
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PacifiCorp respectfully requests that the Commission grant the waiver from the solicitation
requirements, decline to impose a requirement for a separate prudence proceeding, and allow
prudence review to proceed through the ECAM consistent with Commission practice, while
accepting the Company's commitment to provide advance PPA materials to Staff.
Respectfully submitted this 9th day of April, 2026.
Joe Dallas (ISB# 10330)
PacifiCorp,Assistant General Counsel
825 NE Multnomah Street, Suite 2000
Portland, OR 97232
Email:joseph.dallas&pacificorp.com
Attorney for Rocky Mountain Power
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