20260416Final_Order_No_37005.pdf

Office of the Secretary
Service Date
April 16,2026
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN ) CASE NO. PAC-E-26-02
POWER'S APPLICATION FOR AN )
ACCOUNTING ORDER FOR EXCESS ) ORDER NO. 37005
LIABILITY INSURANCE COSTS RELATED )
TO WILDFIRE LIABILITY )
On January 27, 2026, PacifiCorp, d/b/a Rocky Mountain Power ("Company") applied to
the Idaho Public Utilities Commission("Commission")requesting an accounting order authorizing
it to establish a balancing account for tracking (1) annualized revenues associated with excess
liability insurance costs related to wildfires and(2) 80 percent of any Idaho wildfire liability costs
arising from wildfires that ignite on or after February 15, 2026, from February 15, 2026 until the
earlier of a future wildfire reserve fund mechanism's effective date or February 15, 2027
("Application").
On March 2, 2026, the Commission issued a Notice of Application and a Notice of
Modified Procedure setting written comment deadlines. Order No. 36945. Commission Staff
("Staff') filed comments. The Commission received no public comments or Company reply
comments.
With this Order, the Commission approves the Company's Application.
THE APPLICATION
As part of a Commission-approved settlement in the Company's most recent general rate
case, $8.63 million of excess liability insurance attributable to wildfire risk was included in the
Company's base revenue requirement. Application at 3. The settlement also allowed the
PacifiCorp Idaho Industrial Customers and the Idaho Irrigation Pumpers Association to take part
in the Wildfire Insurance Working Group, which also included the Company, P4 Productions,
L.L.C., an affiliate of Bayer Corporation, and Commission Staff(collectively, "Working Group").
Id.
The Working Group is currently working on a joint application to create a reserve fund
from which the Company would recover Idaho wildfire liability costs.Id. The reserve fund would
allow the Company to avoid maintaining commercial excess liability insurance for Idaho wildfire
claims. Id. The Company's excess liability insurance policy covering Idaho wildfires expired at
ORDER NO. 37005 1

midnight on February 14,2026.Id. at 4. The parties to the Working Group agree that the proposed
reserve fund is likely to be more cost effective for customers than renewal of the Company's excess
liability insurance policy.Id.
The Company requested Commission approval of a balancing account for tracking (1)
annualized revenues that the Commission approved as part of the Company's revenue requirement
in its last rate case associated with excess liability insurance costs related to wildfires in the amount
of approximately$8.63 million and(2) 80 percent of any Idaho wildfire liability costs arising from
wildfires that ignite on or after February 15, 2026,1 from February 15, 2026 until the earlier of a
future wildfire reserve fund mechanism's effective date or February 15, 2027—at which point the
Company would re-obtain commercial coverage if the Commission denies the reserve fund
mechanism.Id. at 4-5, 7.
The Company sought authority to record the deferral in Account 254 (Other Regulatory
Liabilities). Id. at 7. The Company anticipated deferring approximately $0.72 million of revenue
monthly. Id. The Company represented that it "is unable to estimate any Idaho wildfire liability
claims and/or associated outside defense counsel expenses that may be deferred during this
period."Id. at 7-8.
Staff supported the Company's request to defer the portion of its revenue requirement
approved for payment of excess liability insurance costs and any wildfire liability arising from
Idaho wildfires that ignite on or after February 15, 2026. Id. at 4. According to the Company, no
party to the Working Group expressed opposition to the deferral request.Id.
STAFF COMMENTS
After reviewing the Application and relevant Commission orders, Staff continued to
support the Company's requested deferral as serving the best interests of the Company and its
customers. Staff Comments at 2-3. According to Staff, the balancing account would allow the
Company to "reconcile the difference between amounts included in base rates and actual
expenses." Id. at 3. Staff stated that approval of the balancing account would not guarantee
approval of all recorded expenses for ratemaking purposes and that the Commission would retain
authority to determine prudency. Id. Staff believed the proposal was consistent with Order No.
' As part of the proposed reserve fund mechanism,the Company has agreed to pay 20 percent of wildfire liabilities
without seeking recovery from customers.Application at 7.
ORDER NO. 37005 2

36452 in the Company's most recent general rate case and fairly incentivizes the Company to
minimize wildfire liabilities by requiring it to cover 20 percent of such costs.Id. at 4.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company's Application and the issues in this
case under Title 61 of the Idaho Code including, Idaho Code §§ 61-501, 502, and -503. Based on
our review of the record, we find it reasonable to grant the Company's Application.
Based on the parties' representation that the proposed reserve fund is likely to be more cost
effective for customers than renewal of the Company's excess liability insurance policy, we find
that the requested balancing account is in the interest of the Company and its customers. The
account will ensure that the previously approved $8.63 million recovered from customers is used
for its intended purpose—covering Company expenses related to wildfire liability.
However, the Commission is concerned about the open-ended potential liability resulting
from the lapse of the Company's excess liability coverage. We are also concerned about wildfire
claims litigated in other states. We reiterate that approval of the balancing account does not confer
approval of all recorded expenses, which will remain subject to a prudency determination for
ratemaking purposes. Additionally, we emphasize that the Company is to record 80 percent of
liability and related outside counsel defense costs incurred only from claims resulting from
wildfires occurring in the state of Idaho in the balancing account.
The Commission directs the Company to submit a reconciliation compliance filing
regarding the balancing account at the end of the fire season but no later than December 31, 2026.
ORDER
IT IS HEREBY ORDERED that the Company's request to establish a balancing account
to track $8.63 million in annualized revenue related to wildfire liability costs, which the
Commission approved for excess liability expenses as part of the Company's revenue requirement
in its last rate case, is approved.
IT IS FURTHER ORDERED that the Company's request to record 80 percent of liability
and related outside counsel defense costs incurred from claims resulting from wildfires occurring
in the state of Idaho on or after February 15, 2026, is approved, until the earlier of the
implementation of a wildfire reserve fund mechanism, or February 15, 2027.
ORDER NO. 37005 3

IT IS FURTHER ORDERED that the Company shall submit a reconciliation compliance
filing regarding the balancing account at the end of the fire season but no later than December 31,
2026.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within 21 days of the service date of this Order regarding any matter decided in
this Order. Within seven days after any person has petitioned for reconsideration, any other person
may cross-petition for reconsideration.Idaho Code §§ 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this 16th day of
April 2026.
G
EDWARD LODGE, PR VDENT
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JO R. HAMMOND JR., COMMISSIONER
DAYN HAKDIE, COMMISSIONER
ATTEST:
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Momc Ba o nchez
Commission Secretary
L\Legal\ELECTRIC\PAC-E-26-02_accounting order\orders\PACE2602_FOjl.docx
ORDER NO. 37005 4