20260522Final_Order_No_37049.pdf

Office of the Secretary
Service Date
May 22,2026
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN ) CASE NO. PAC-E-25-20
POWER'S APPLICATION FOR A WAIVER )
OF THE SOLICITATION REQUIREMENTS ) ORDER NO. 37049
PROPOSED IN CASE NO. GNR-E-25-01 )
On October 20, 2025, PacifiCorp, d/b/a Rocky Mountain Power ("Company") applied to
the Idaho Public Utilities Commission ("Commission") requesting an order approving a waiver
from the Request for Proposal("RFP") solicitation procedure ("Solicitation Procedure")proposed
by Commission Staff("Staff') in Case No. GNR-E-25-01,1 in connection with the Company's
power purchase agreement ("PPA") concerning the Natrium Reactor Plant, Kemmerer Power
Station Unit 1 ("KU1") ("Application").
On January 15, 2026, the Commission issued a Notice of Modified Procedure setting
written comment deadlines. Order No. 36907. Commission Staff ("Staff') filed comments to
which the Company replied. The Commission also received one public comment.
With this Order, the Commission approves the Company's Application with additional
directives detailed below.
THE APPLICATION
According to the Company, US SFR Owner, LLC, a subsidiary of TerraPower, LLC, was
in the process of obtaining approval from the Nuclear Regulatory Commission to construct the
KU1 project near the Company's Naughton Power Plant ("Naughton"). Application at 3. The
Company stated that "[t]he KU1 project is a 345-megawatt sodium-cooled nuclear steam electric
generating plant coupled with a molten salt integrated energy storage system."Id.
Due to the time-sensitive nature of the KU1 project, the Company was seeking a waiver
from the Solicitation Procedure proposed by Staff in Case No. GNR-E-25-01. Id. The Company
stated that under Staff s proposals, prior to the acquisition of an electrical resource of 100
megawatts or greater for a duration of at least 10 years that will be subject to recovery from Idaho
ratepayers,a utility must solicit resources by issuing an RFP.Id. at 4. Staff s proposed RFP process
' Case No. GNR-E-25-01 was pending at the time the Company filed the Application. On January 2, 2026, the
Commission issued Order No. 36898, modifying the RFP oversight process for the acquisition of large supply-side
electrical resources.
ORDER NO. 37049 1

also included a mechanism by which the Commission would grant waivers to the Solicitation
Procedure upon the utility's showing of a unique economic opportunity that justifies bypassing the
usual requirements.Id.
The Company characterized its PPA related to KU1 as a unique economic opportunity due
to: (1) the significant advancements in nuclear technology embodied in KU1, which allow for
uncommon energy dispatchability and operational flexibility; (2)comprehensive risk management
and safety provisions included in the PPA, including significant protections for unknown
performance risks associated with KUl and the federal safety oversight inherent in a nuclear
project; and (3) cognizable long-term benefits, such as operational knowledge that the Company
can deploy in future opportunities.Id. at 4-7.
The Company represented that forgoing the Solicitation Procedure for the PPA was in the
public interest and necessary for several reasons that are unique to the KUl project. Id. at 7.
Specifically, the Company stated that federal funding requirements, the unique commercial
opportunity, the geographic and infrastructure limitations connected to the Company's use of
Naughton, and a lack of viable alternatives with the same benefits make the PPA a time-sensitive
opportunity and obviate the need for an RFP process.Id. at 7-9. The Company stated that the KUl
project has been included in its three most recent Integrated Resource Plans ("IRP") as part of the
least-cost, least-risk portfolio of resource options. Id. at 9.
STAFF COMMENTS
After reviewing the Application, its confidential attachments (including the PPA, Water
Use Agreement, and Governance Memorandum), and the Company's discovery responses, Staff
recommended that the Commission approve the Company's request for a waiver of the Solicitation
Procedure, subject to additional directives. Staff Comments at 3. Staff believed that the
Commission should require the Company to file a case for determining the prudence of the PPA
in advance of the commercial operation date ("COD") of the KU1 project and to provide updates
regarding the progress of the project in future IRPs.Id.
To guide its analysis concerning the appropriateness of the requested waiver, Staff focused
on the waiver policy outlined in Order No. 36898, which allows for a waiver of the Solicitation
Procedure "[fJor unsolicited economic-based, or large customer-funded, opportunities outside of
the RFP process"upon the utility's application to the Commission justifying "the need and/or the
ORDER NO. 37049 2

economic value of the opportunity, and why the normal RFP process should not apply." Id.
(quoting Order No. 36898, Attachment A at 2-3).
First, Staff believed the Company has demonstrated a need for new resources.Id. at 4. The
Company's most recent Commission-acknowledged IRP projected sustained load growth for the
20-year planning period.Id. "Staff did not dispute that thousands of[megawatts] of new resources
must be acquired to reliably serve future load, and that nuclear power is part of the preferred
resource portfolio."Id.
Additionally, Staff believed that the KU1 project would provide economic and long-term
operational benefits. Id. at 4-6. Staff stated that the Company's reasonably estimated Net Power
Cost savings resulting from the PPA met the economically beneficial waiver criteria,while noting
the projected savings were modest. Id. at 4-5. According to Staff, the PPA would provide more
substantial benefits in the form of reliable, long-term baseload dispatchable power, fuel diversity,
carbon-free energy, and operational nuclear sector insight and experience.Id. at 5.
Staff further believed that the Company had adequately sought to mitigate potential risks
associated with the PPA.Id. at 5-6. Staff listed cost overruns, construction delays, and the gravity
of nuclear accidents as historic risks associated with nuclear resources. Id. at 5. However, Staff
stated that the Company and its customers are sufficiently protected from these risks under the
PPA because the developer assumed all risks for cost overruns,Naughton will continue operating
in the event of delays to the KU1 project, and the use of liquid metal coolant(avoiding the need to
operate the system at high pressure) and PPA indemnification provisions mitigate the risks
associated with nuclear incidents. Id. at 6-8. Staff also believed the developer bore the risk of
interconnection costs associated with the KU1 project.Id. at 8.
According to Staff,the Company's usual process for attaining PPA cost recovery approval
through a general rate case ("GRC") or Electric Cost Adjustment Mechanism ("ECAM")
proceeding might not suffice for the KU1 project.Id. at 9. Staff believed that the unique qualities
of the KU1 project and accompanying PPA warranted a dedicated resource prudency filing. Id.
Staff stated that prudence filing "should occur as near to the COD as possible."Id. (emphasis in
original).
PUBLIC COMMENTS
Ruveon LLC, an affiliate of Bayer Corporation ("Bayer"), filed a public comment
expressing non-opposition to a one-time waiver of the Solicitation Procedure for the KU1 project.
ORDER NO. 37049 3

Bayer Comments at 1. However, Bayer recommended that the Commission clearly state that
granting a waiver should not be interpreted as a determination that the project is prudent for
ratemaking purposes. Id.
COMPANY REPLY COMMENTS
Although the Company generally supported Staff s recommendations and agreed with its
analysis, it opposed the recommendation requiring a prudence review filing for the KU1 PPA.
Company Comments at 2. The Company stated that the Solicitation Procedure's post-selection
process expressly grants the utility discretion to forgo a pre-operation resource prudence review.
Id. The Company contended that there was no legal or policy justification to revisit the recently
established Solicitation Procedure.Id. The Company further argued that prudence reviews should
involve analyzing the information available when the resource decision was made—not by using
updated information available closer to the COD, as Staff s recommendation implied.Id. at 4.
To alleviate Staff s concerns about an expedited prudence review of the PPA in a GRC or
ECAM docket, the Company proposed providing the following information concerning the KU 1
project 90 days in advance of the first GRC or ECAM filing following the COD:
1. 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.
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.
Id. at 5-6.
ORDER NO. 37049 4

The Company also provided updates concerning its KU1-related filings in other
jurisdictions. Id. at 7. The Wyoming Public Service Commission has approved the Company's
Waiver of Solicitation Requirement and Water Right Disposition Approval applications. Id. The
Company has similar pending proceedings in California, Oregon, and Utah. Id. Generally, the
Company noted a lack of opposition, if not explicit support, at this stage among relevant parties.
Id.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Application and the issues in this case under
Title 61 of the Idaho Code including,Idaho Code §§ 61-501, -502, and -503. The Commission is
empowered to investigate rates, charges, rules, regulations, practices, and contracts of all public
utilities and to determine whether they are just, reasonable, preferential, discriminatory, or in
violation of any provisions of law, and to fix the same by order. Idaho Code §§ 61-501, -502, and
-503.
Having reviewed the record, we find it fair,just, and reasonable to grant the Company's
request for a limited, one-time waiver of the Commission's Solicitation Procedure. While we
expect electric utilities to abide by the Solicitation Procedure to ensure least-cost, least-risk
resource acquisition, the Commission concludes that the Company has met the standard for a
waiver by demonstrating an imminent need for new resources and that KUl is a unique, time-
sensitive project that could provide long-term benefits to the Company and its customers. While
the Commission has concerns about the potential for cost overruns and delays, particularly
considering the new technology employed by the KU1 project, we find that the PPA adequately
mitigates the risks posed to the Company and its customers.
As acknowledged in each comment filed in this case, neither the waiver granted here nor
commencement of commercial operations permit the Company to recover costs associated with
the PPA through customer rates. To recover such costs,the Company must seek a prudence review
in an appropriate docket. The Commission will not prescribe the process the Company must use
to seek a prudence determination of the PPA.However,the unique nature of KU1 that helps justify
a waiver of the Solicitation Procedure also presents atypical challenges to Staff in the project
auditing process. The Commission appreciates the Company's commitment to provide Staff with
specified project information at least 90 days before the filing seeking a prudence determination
and adopts this commitment as a condition of the waiver granted.
ORDER NO. 37049 5

Despite declining to require a dedicated prudence filing for the PPA, as recommended by
Staff, we note Staff s ability to request and obtain information regarding the PPA, independent of
any proceeding before the Commission. Under Idaho Code § 61-610, Staff maintains "the right at
any and all reasonable times to inspect the accounts, books, papers and documents of any public
utility." Commission Rule of Procedure No. 227 confirms Staff s right"to review and inspect the
books, records and premises of regulated utilities..." and Staffs ability to exercise the right
"whether or not a formal proceeding is ongoing or a regulated utility or carrier is party to a formal
proceeding before the Commission." Rule 227 also provides that "[i]nformation obtained from
statutory examination and audit may be used in formal proceedings or for any other regulatory
purpose."
Additionally, we instruct the Company to provide status updates as to the progress of the
KU1 project in each future IRP and to otherwise apprise Staff of significant project developments.
Such developments would include, but are not limited to, cost overruns and construction and
permitting delays.
ORDER
IT IS HEREBY ORDERED that the Company's request for a waiver of the Commission's
Solicitation Procedure for the PPA associated with the KU1 project is granted.
IT IS FURTHER ORDERED that the Company shall provide to Staff all KU1 project
information described in the Company's reply comments at least 90 days in advance of the GRC
or ECAM filing in which the Company seeks a prudence determination regarding the project.
IT IS FURTHER ORDERED that the Company provide status updates as to the progress
of the KU1 project in each future IRP and that the Company keep Staff apprised of significant
project developments.
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.
ORDER NO. 37049 6

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this 22"d day of
May 2026.
G
EDWARD LODGE PR c DENT
Ir-IL
JO R. HAMMOND JR., COMMISSIONER
1
DAYN HAKDIE, COMMISSIONER
ATTEST:
M`66M a o nchez
Commission Secretary
I:\Legal\ELECTRIC\PAC-E-25-20_waiver\orders\PACE2520_FO;l.docx
ORDER NO. 37049 7