20260923Direct Anderson.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION )
OF IDAHO POWER COMPANY TO ) CASE NO. IPC-E-26-07
EVALUATE CLASS COST-OF- )
SERVICE METHODOLOGY, CONSIDER )
ALTERNATIVE CLASS COST-OF- )
SERVICE STUDIES, AND )
DETERMINE COST OF SERVICE )
CONSIDERATIONS FOR NEW LARGE- )
LOAD CUSTOMERS )
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
GRANT T . ANDERSON

1 I . Introduction
2 Q. Please state your name and business address .
3 A. My name is Grant T. Anderson. My business
4 address is 1221 West Idaho Street, Boise, Idaho 83702 .
5 Q. By whom are you employed and in what capacity?
6 A. I am employed by Idaho Power Company ("Idaho
7 Power" or "Company") as a Pricing and Tariff Manager in the
8 Regulatory Affairs Department .
9 Q. Please describe your educational and pre-Idaho
10 Power employment background.
11 A. In May 2013, I received a Bachelor of Science
12 degree in Microbiology from Oregon State University. In May
13 2015, I earned a Master of Business Administration degree
14 from Boise State University. In March 2015, I joined
15 Albertsons as a Corporate Development Analyst. In 2017, I
16 was promoted to Corporate Development Manager and served in
17 this capacity until joining Idaho Power in 2018 .
18 After joining Idaho Power, I completed "Practical
19 Regulatory Training for the Electric Industry, " offered
20 through New Mexico State University' s Center for Public
21 Utilities, and the "Utility Finance and Accounting" course
22 offered through the Financial Accounting Institute .
23
ANDERSON, DI 2
Idaho Power Company

1 Q. Please describe your work experience with
2 Idaho Power.
3 A. I joined Idaho Power' s Regulatory Affairs
4 Department as a Regulatory Analyst in 2018 . My primary
5 responsibilities included supporting rate design for the
6 Company' s commercial and industrial customer classes and
7 the administration of the Company' s tariffs, rules, and
8 regulations .
9 In 2021, I was promoted to Regulatory Consultant. In
10 that role, my responsibilities expanded to include
11 developing complex cost-of-service studies and pricing
12 strategies .
13 In April 2025, I was promoted to my current position
14 as Pricing and Tariff Manager. My primary responsibilities
15 include overseeing the Company' s pricing strategies, class
16 cost-of-service activities, and tariff administration.
17 Q. What is the purpose of your testimony?
18 A. The purpose of my testimony is to present
19 Idaho Power' s recommendations regarding class cost-of-
20 service ("CCOS") methodology and the allocation of
21 identified growth-related portions of generation and
22 transmission costs, including in the context of growth from
23 New Large Load ("NLL") customers .
24 I explain the framework the Company recommends that
25 the Idaho Public Utilities Commission ("Commission") use to
ANDERSON, DI 3
Idaho Power Company

1 evaluate cost-allocation methodologies, present the
2 Company' s conclusions based on the record developed in this
3 proceeding, and identify the findings and actions the
4 Company requests from the Commission. I also explain how
5 the Commission' s guidance should inform future general rate
6 cases and NLL proceedings .
7 My testimony relies on the technical analyses and
8 conclusions presented by Company witness Connor Allen. Mr.
9 Allen explains the methodologies, supporting calculations,
10 and study results . I address the broader regulatory and
11 policy considerations, the Company' s ultimate
12 recommendations, the application of the proposed framework
13 in future proceedings, and the requested Commission
14 findings and actions .
15 Q. At a high level, what guidance does Idaho
16 Power request that the Commission provide in its order?
17 A. Idaho Power requests that the Commission:
18 1 . Establish a consistent framework for evaluating CCOS
19 methodologies;
20 2 . Direct Idaho Power to use the Peak & Average Embedded
21 Method ("PAEM") , with the application of the Growth
22 Responsibility Method ("GRM") , to prepare the CCOS study
23 filed in the Company' s next general rate case; and
24 3 . Recognize that applying GRM within the CCOS study
25 supports implementation of Idaho Code § 61-335 .
ANDERSON, DI 4
Idaho Power Company

1 II . Background and Purpose of the Proceeding
2 Q. Why was this proceeding initiated?
3 A. This proceeding originated from the settlement
4 approved by the Commission in Idaho Power' s 2025 general
5 rate case. In approving the settlement, the Commission
6 contemplated a separate proceeding in which the Company and
7 interested parties could more fully evaluate CCOS
8 methodologies outside the constraints of a general rate
9 case . The proceeding also provides a forum to consider
10 cost-of-service issues associated with NLL customers .
11 Consistent with the Commission' s direction, Idaho
12 Power initiated this proceeding to develop a more complete
13 record concerning two related but distinct subjects : the
14 methodology used to allocate embedded utility costs among
15 customer classes and the appropriate consideration of
16 measured customer-class growth in allocating identified
17 growth-related portions of generation and transmission
18 costs, including in the context of growth from NLL
19 customers .
20 Q. Did Idaho Power request that the Commission
21 approve a specific CCOS methodology in its Petition?
22 A. No. Idaho Power' s Petition was intended to
23 initiate a transparent process for evaluating alternative
24 methodologies and developing a more complete record. The
25 Company did not initially ask the Commission to approve a
ANDERSON, DI 5
Idaho Power Company

I particular CCOS methodology. Instead, the Petition
2 presented alternative analyses and supporting information
3 to facilitate review by the Commission and interested
4 parties .
5 This approach recognized that CCOS methodologies
6 necessarily involve analytical choices and informed
7 judgment. A focused proceeding provides an opportunity to
8 evaluate those choices, their underlying assumptions, and
9 their effects on class cost responsibility more fully
10 outside of a general rate case .
11 Q. How has the Company' s position developed since
12 filing its Petition?
13 A. Since filing the Petition, Idaho Power has
14 further evaluated the methodologies and policy issues
15 presented through stakeholder participation, discovery, and
16 additional technical analysis . Based on that work, the
17 Company is now in a position to recommend the methodology
18 it should use to prepare the class cost-of-service study
19 filed in its next general rate case.
20 The Company has also evaluated how measured
21 customer-class demand and energy growth may be incorporated
22 into the allocation of identified growth-related portions
23 of generation and transmission costs . Company witness Mr.
24 Connor L. Allen presents the technical analyses supporting
25 Idaho Power' s recommendations, including PAEM, the related
ANDERSON, DI 6
Idaho Power Company

1 comparison studies, the Hourly-Informed Method, and GRM. My
2 testimony relies on that technical record to present the
3 Company' s ultimate recommendations and requested Commission
4 findings and actions .
5 III . Scope of the Proceeding
6 Q. What are the principal issues before the
7 Commission in this proceeding?
8 A. This proceeding addresses three related
9 issues : (1) the framework the Commission should use to
10 evaluate CCOS methodologies, (2) the methodology Idaho
11 Power should use to prepare the class cost-of-service study
12 filed in its next general rate case, and (3) how that
13 methodology supports implementation of Idaho Code § 61-335
14 for NLL customers .
15 Q. How does the Company' s proposed methodology
16 address the full cost of serving NLL customers?
17 A. PAEM and GRM, together with appropriate
18 customer-specific cost treatment, provide a reasonable
19 framework for addressing the full cost of serving NLL
20 customers .
21 PAEM allocates responsibility for the costs of the
22 integrated utility system reflected in the Company' s
23 revenue requirement. GRM provides additional treatment for
24 identified growth-related portions of generation and
ANDERSON, DI 7
Idaho Power Company

1 transmission costs by incorporating both embedded cost
2 responsibility and measured customer-class growth.
3 The methodologies operate together with customer-
4 specific cost treatment supported by the applicable record.
5 Costs or facilities identified with the service
6 requirements of a particular NLL customer may require
7 customer-specific treatment in the applicable proceeding.
8 Taken together, these mechanisms recognize that
9 shared-system costs, identified growth-related costs, and
10 customer-specific costs may appropriately be addressed
11 through complementary forms of cost responsibility. This
12 approach supports implementation of Idaho Code § 61-335,
13 while the appropriate customer-specific treatment would
14 remain subject to the service contract, no-harm test,
15 comprehensive cost study, and supporting record applicable
16 to the particular NLL.
17 Q. What matters are not resolved by the
18 Commission' s guidance in this proceeding?
19 A. The Company is not asking the Commission in
20 this proceeding to establish the final interclass revenue
21 allocation or rate design used to set customer rates .
22 Rather, the methodology guidance requested in this
23 proceeding would provide greater consistency in future
24 cost-of-service analysis without predetermining customer-
25 specific outcomes .
ANDERSON, DI 8
Idaho Power Company

1 Additionally, the Company is not asking the
2 Commission in this proceeding to approve customer-specific
3 contract terms or other service conditions for future NLL
4 customers . Those determinations will depend on facts that
5 may differ by customer and could change over time and,
6 therefore, should be addressed in the proceeding reviewing
7 the applicable NLL service contract .
8 Q. How does this proceeding relate to Idaho
9 Power' s proposed marginal cost-based energy pricing
10 framework in Case No. IPC-E-26-26?
11 A. The two proceedings address different
12 categories and treatments of costs . Case No. IPC-E-26-26
13 addresses the pricing and recovery of power supply costs
14 for customers taking service under a marginal cost-based
15 energy rate, including costs and revenues accounted for
16 through the Power Cost Adjustment ("PCA") . This proceeding
17 addresses the classification and allocation of costs
18 reflected in the Company' s embedded CCOS that are not
19 recovered through the PCA.
20 IV. Framework for Evaluating Cost-Allocation Methodologies
21 Q. What framework does Idaho Power recommend the
22 Commission use to evaluate cost allocation methodologies?
23 A. Idaho Power recommends that the Commission
24 evaluate a cost-allocation methodology based on its overall
25 reasonableness, including how well it aligns cost
ANDERSON, DI 9
Idaho Power Company

1 responsibility with the underlying drivers of the costs
2 being allocated.
3 The primary substantive considerations should be
4 whether the methodology reasonably reflects cost causation,
5 supports responsibility for the full cost of service,
6 avoids undue or unreasonable preferences, discrimination,
7 or cost shifting, and appropriately recognizes the shared
8 nature and benefits of the integrated utility system.
9 The Commission should also consider whether the
10 methodology is transparent, repeatable, reasonably stable,
11 and practical to administer. These considerations help
12 determine whether the methodology can be understood,
13 reviewed, and consistently applied in future proceedings .
14 The Commission should evaluate these considerations
15 together rather than treating any single consideration as
16 determinative. The appropriate weight assigned to each
17 consideration may depend on the nature of the costs and the
18 methodological question being evaluated.
19 Q. What does cost causation mean in the context
20 of class cost-of-service analysis?
21 A. Cost causation generally refers to the
22 relationship between the characteristics and requirements
23 of utility service and the costs the Company incurs to
24 provide that service. A CCOS methodology uses available
25 measures of customer usage and system requirements to
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Idaho Power Company

1 allocate the Company' s embedded costs among customer
2 classes .
3 Cost causation does not always allow each investment
4 or expense to be traced to a single customer or class .
5 Utility resources and infrastructure are generally planned
6 and operated to meet multiple system requirements and
7 provide service to customers with different usage
8 characteristics . As a result, cost-allocation methodologies
9 necessarily rely on reasonable classifications, allocation
10 factors, proxies, and informed judgment.
11 The relevant question is therefore not whether a
12 methodology perfectly traces each cost to an individual
13 customer or class . Rather, the Commission should consider
14 whether the methodology reasonably reflects the service
15 characteristics and system requirements associated with the
16 costs being allocated and assigns responsibility in a
17 manner supported by the record.
18 Q. How should shared-system benefits be
19 considered when evaluating cost-allocation methodologies?
20 A. Generation and transmission investments that
21 operate as part of the integrated system may provide
22 capability or support service beyond the customer or class
23 whose requirements contributed to the need or scale of the
24 investment. This consideration is particularly relevant for
25 facilities that operate as part of the integrated system
ANDERSON, DI 11
Idaho Power Company

1 and support multiple customers, customer classes, and
2 system needs .
3 Shared-system benefits should be considered together
4 with cost causation. The fact that an investment provides
5 shared-system benefits does not eliminate the relevance of
6 the customer growth or other system requirements that
7 contributed to the investment. Similarly, the fact that
8 growth contributed to an investment does not necessarily
9 support assigning the entire investment exclusively to
10 classes with measured growth.
11 A reasonable methodology should recognize both
12 considerations based on the nature of the costs and the
13 record supporting their allocation .
14 Q. How should the Commission balance
15 methodological consistency with the potential need for
16 future refinement?
17 A. The Commission should provide clear
18 methodological direction while preserving reasonable
19 flexibility for future refinement.
20 The methodology directed by the Commission should
21 provide a consistent structure for future CCOS studies, but
22 its application must reflect the system conditions,
23 resource portfolio, customer usage patterns, investments,
24 and available information applicable to the period being
25 studied.
ANDERSON, DI 12
Idaho Power Company

1 Routine updates to study inputs should be
2 distinguished from material changes to the methodology
3 itself. Material methodological changes should be
4 transparently presented, supported by the record, and
5 evaluated using the principles established in this
6 proceeding.
7 This approach would promote consistency and
8 predictability without treating the methodology as
9 permanently fixed or preventing reasonable improvements as
10 system conditions, information, and analytical capabilities
11 evolve .
12 Q. Does the existence of more than one
13 potentially reasonable methodology prevent the Commission
14 from directing the use of a specified methodology?
15 A. No. CCOS methodologies necessarily involve
16 judgment, and more than one approach may warrant
17 consideration. That does not mean all methodologies are
18 equally appropriate for the questions presented or that the
19 Commission cannot direct the use of the methodology it
20 finds most reasonable.
21 Directing the Company to file a specified
22 methodology would provide clarity and consistency.
23 Interested parties would remain free to present alternative
24 analyses, and the Commission could consider any
25 alternatives supported by the record.
ANDERSON, DI 13
Idaho Power Company

1 A methodology should not be selected or rejected
2 solely because of the allocation results it produces for a
3 particular customer class . The Commission should instead
4 consider the methodology' s assumptions, the cost
5 characteristics it recognizes, and its overall performance
6 under the evaluation framework.
7 V. Idaho Power' s Peak & Average Embedded Method (PAEM)
8 Q. What embedded class cost-of-service
9 methodology does Idaho Power recommend?
10 A. Idaho Power recommends that the Commission
11 direct the Company to use PAEM as the embedded
12 classification and allocation framework for the class cost-
13 of-service study filed in its next general rate case .
14 PAEM is a targeted refinement to the class cost-of-
15 service methodology reflected in the Company' s 2025 general
16 rate case. Under PAEM, eligible production plant is
17 classified between demand-related and energy-related
18 components using the Peak & Average method described in the
19 NARUC Electric Utility Cost Allocation Manual . PAEM retains
20 the existing treatment of battery storage, purchased power,
21 demand response, and transmission, as well as the
22 applicable production and transmission allocation
23 methodologies .
24 Mr. Allen explains the technical implementation of
25 PAEM, the treatment of the individual cost categories, and
ANDERSON, DI 14
Idaho Power Company

1 the resulting class allocations . My testimony explains why
2 PAEM should provide the embedded classification and
3 allocation framework for the Company' s next filed CCOS
4 study.
5 Q. Why does Idaho Power recommend PAEM?
6 A. Idaho Power believes PAEM provides a
7 reasonable, transparent, and durable framework for
8 allocating embedded costs among customer classes .
9 As Mr. Allen explains, eligible production plant
10 supports both the generating capability needed to meet
11 maximum system demand and the energy required to serve
12 customers throughout the year. The Peak & Average method
13 recognizes both characteristics by classifying eligible
14 production plant between demand-related and energy-related
15 components .
16 PAEM also recognizes that different cost categories
17 have different characteristics . It retains the existing
18 treatment of battery storage, purchased power, demand
19 response, and transmission rather than applying the Peak &
20 Average method uniformly to all production- and
21 transmission-related costs .
22 When considered as a whole, the Company believes
23 this targeted approach appropriately balances cost-
24 causation considerations with transparency, repeatability,
ANDERSON, DI 15
Idaho Power Company

1 methodological continuity, and practical application in
2 future proceedings .
3 Q. Why does Idaho Power characterize PAEM as a
4 targeted refinement?
5 A. Compared with the 2025 COOS, PAEM changes the
6 classification of eligible production plant while retaining
7 the existing treatment of battery storage, purchased power,
8 demand response, and transmission, as well as the
9 applicable production and transmission allocation
10 methodologies .
11 Idaho Power is not proposing to replace the broader
12 embedded CCOS framework or alter every classification and
13 allocation decision within the study. The Company is
14 recommending a defined change where the technical record
15 supports improved recognition of the demand-related and
16 energy-related characteristics of eligible production
17 plant .
18 Retaining the other elements of the 2025 CCOS
19 methodology also provides greater transparency. The studies
20 presented by Mr. Allen allow the Commission and interested
21 parties to evaluate the effect of the proposed production-
22 plant classification change separately from the effects of
23 alternative treatments for purchased power, transmission,
24 and production demand allocation.
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Idaho Power Company

1 This targeted approach refines the treatment of
2 eligible production plant while providing continuity with a
3 familiar and repeatable CCOS framework that can be updated
4 in future proceedings .
5 Q. How did the embedded CCOS studies evaluated in
6 this proceeding inform Idaho Power' s recommendation?
7 A. Idaho Power evaluated PAEM against the class
8 cost-of-service methodology reflected in the Company' s 2025
9 general rate case and the alternative studies presented in
10 this proceeding.
11 The 2025 CCOS provides the principal benchmark for
12 identifying the methodological changes reflected in PAEM
13 and how those changes affect class cost responsibility. The
14 alternative studies provide information regarding specific
15 classification and allocation choices .
16 Idaho Power did not treat the alternative studies as
17 coequal recommendations or select PAEM solely based on the
18 overall class results produced by any one study. Instead,
19 the Company considered the particular methodological
20 question each study was designed to evaluate, including the
21 classification of production plant and purchased power, the
22 treatment of transmission, and the allocation of demand-
23 related production costs .
24 Based on that evaluation, the Company concluded that
25 PAEM best aligns with the methodology-evaluation framework
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Idaho Power Company

1 described earlier in my testimony and should provide the
2 embedded classification and allocation framework for Idaho
3 Power' s next filed COOS study.
4 Q. What role should the Hourly-Informed Method
5 play in evaluating embedded class cost-of-service
6 methodology?
7 A. The Hourly-Informed Method provides
8 information regarding customer-class load shapes, the
9 timing of energy usage, modeled resource-dispatch patterns,
10 and the allocation outcomes produced by an hourly energy-
11 based approach.
12 As Mr. Allen explains, however, the method
13 ultimately allocates production costs through hourly energy
14 usage and transmission costs through annual energy usage .
15 Although those measures provide information regarding when
16 and how much energy customers use, they do not measure
17 class responsibility for the generation and transmission
18 capability provided by long-lived system investment.
19 The Hourly-Informed Method also requires substantial
20 hourly data, modeling assumptions, and alignment of
21 customer load shapes, resource dispatch, resource costs,
22 and annual embedded costs . These considerations limit its
23 suitability as an embedded CCOS methodology.
24 Idaho Power therefore recommends that the Commission
25 direct the Company to use PAEM as the embedded
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Idaho Power Company

1 classification and allocation framework for its next filed
2 CCOS study and not require the Company to prepare an
3 Hourly-Informed study as part of that filing. If an Hourly-
4 Informed analysis is presented in a future proceeding to
5 address a defined methodological question, it should be
6 treated as supplemental information rather than as a
7 replacement for PAEM.
8 Q. Would adoption of PAEM change the operation of
9 the Company' s Fixed Cost Adjustment mechanism?
10 A. No. PAEM addresses the classification and
11 allocation of costs within the Company' s class cost-of-
12 service study. It does not modify the fixed-cost components
13 tracked through the Fixed Cost Adjustment ("FCA")
14 mechanism.
15 The FCA would continue to classify all fixed
16 production costs as fixed in determining and tracking
17 allowed and actual fixed-cost recovery. Under PAEM, a
18 portion of fixed production plant costs would be classified
19 as energy-related for class cost-of-service purposes . Those
20 costs would continue to be included in the FCA fixed-cost
21 calculation. Accordingly, the FCA workpapers would be
22 updated to include all fixed production costs allocated to
23 the applicable class, regardless of whether those costs are
24 classified as demand-related or energy-related under PAEM.
ANDERSON, DI 19
Idaho Power Company

1 This conforming update would preserve the existing scope of
2 fixed costs tracked through the FCA.
3 VI . Growth Responsibility Method (GRM)
4 Q. Why is Idaho Power addressing growth-related
5 cost responsibility in this proceeding?
6 A. Significant customer growth can contribute to
7 the need or scale of generation and transmission
8 investments . This relationship may be particularly
9 important when growth occurs in large, concentrated
10 increments .
11 Traditional embedded COOS methodologies allocate
12 investments after the associated costs are included in the
13 Company' s revenue requirement. Those methodologies assign
14 responsibility based on customer-class usage
15 characteristics, but they do not separately measure whether
16 changes in customer-class requirements contributed to the
17 need or scale of the investments being allocated.
18 Consistent with the purpose of this proceeding,
19 Idaho Power evaluated whether its CCOS framework could more
20 directly recognize the relationship between measured
21 customer-class growth and identified growth-related
22 portions of generation and transmission costs while
23 preserving embedded responsibility for facilities that
24 operate as part of the integrated system. That evaluation
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Idaho Power Company

1 resulted in the GRM, which Mr . Allen explains in his
2 testimony.
3 Q. How does GRM relate to PAEM?
4 A. GRM builds on PAEM rather than replacing it .
5 PAEM establishes the embedded classification and
6 allocation framework for the Company' s CCOS study. GRM then
7 applies growth-weighted treatment to identified growth-
8 related portions of applicable generation and transmission
9 costs by incorporating both embedded cost responsibility
10 and measured customer-class growth.
11 Costs not receiving growth-weighted treatment
12 continue to be allocated through PAEM. GRM therefore
13 operates within the Company' s embedded CCOS framework and
14 addresses a cost-allocation consideration that is not
15 separately measured through traditional embedded
16 allocation.
17 Q. Why does GRM incorporate both embedded cost
18 responsibility and measured customer-class growth?
19 A. Each component reflects a relevant aspect of
20 cost responsibility.
21 An embedded COOS study reflects each class' s
22 responsibility for the integrated system based on the
23 classification and allocation factors used in the study,
24 but those factors do not separately measure whether changes
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Idaho Power Company

1 in customer-class requirements contributed to the need or
2 scale of identified investments .
3 The growth component recognizes that measured
4 customer-class growth provides relevant information about
5 changes in customer requirements that may have contributed
6 to the need or scale of those investments . The embedded
7 component recognizes that generation and transmission
8 facilities generally operate as part of the integrated
9 system and provide capability and benefits to multiple
10 customer classes .
11 Allocating the applicable costs solely through
12 embedded factors would not separately recognize measured
13 customer-class growth. Conversely, allocating those costs
14 solely based on growth would fail to recognize broader
15 system responsibility. GRM balances these considerations by
16 incorporating measured customer-class growth while
17 preserving embedded responsibility for shared-system costs .
18 Q. How did the Company determine whether an
19 investment was growth-related?
20 A. The Company identified investments for which
21 the customer growth evaluated contributed to the need or
22 scale of the investment. This standard distinguishes
23 growth-related investment from investment needed primarily
24 to maintain, replace, or otherwise support the existing
25 system.
ANDERSON, DI 22
Idaho Power Company

1 Q. Does identifying an investment as growth-
2 related mean it serves only classes with measured growth?
3 A. No. Identifying an investment as growth-
4 related does not establish that growth is its exclusive
5 cause, that the facility serves only classes with measured
6 growth, or that the investment does not address other
7 system needs . Generation and transmission investments may
8 address multiple system needs and may provide capability
9 and benefits to multiple customer classes after entering
10 the integrated system.
11 The appropriate allocation should therefore
12 recognize both the role of growth in the investment and the
13 investment' s continuing function within the integrated
14 system. GRM does this by applying growth-weighted treatment
15 to a calculated portion of applicable costs while retaining
16 embedded treatment for the remaining portion.
17 Q. Is GRM a form of direct assignment?
18 A. No. GRM operates at the customer-class level
19 and does not directly assign an individual generation or
20 transmission project to a particular customer or customer
21 class .
22 Customer-specific cost treatment may be appropriate
23 when facilities or costs can be identified with the service
24 requirements of a particular customer. Those determinations
ANDERSON, DI 23
Idaho Power Company

1 depend on the applicable facts and record and serve a
2 different purpose from GRM.
3 Q. Is GRM limited to NLL customers?
4 A. No . GRM measures growth at the customer-class
5 level and applies to classes with measured growth. NLL
6 customers are particularly relevant because their size may
7 result in large, concentrated additions to system load.
8 VII . Application in Future Proceedings
9 Q. How should PAEM and GRM be updated when
10 applied in Idaho Power' s next general rate case?
11 A. PAEM would provide the embedded classification
12 and allocation framework for the study. GRM would identify
13 the portions of applicable generation and transmission
14 costs receiving growth-weighted treatment based on the
15 growth-related investments and customer-class growth
16 identified for the period evaluated.
17 The Company would apply PAEM using the test-year
18 revenue requirement, customer-class billing determinants,
19 load information, and other inputs applicable to that
20 proceeding. Application of GRM would use updated
21 information concerning the applicable measurement period,
22 identified growth-related investments, customer-class
23 growth, embedded allocation factors, and other relevant
24 inputs .
ANDERSON, DI 24
Idaho Power Company

1 The results presented in this proceeding illustrate
2 how PAEM and GRM operate using the infrastructure
3 investment, customer-class growth, and other information
4 evaluated in the analyses . The specific results in a future
5 general rate case would reflect the record developed in
6 that proceeding, including identification of growth-related
7 investments and any implementation refinements supported by
8 the available information.
9 Q. What documentation should accompany Idaho
10 Power' s class cost-of-service study?
11 A. Idaho Power' s filed COOS study should include
12 sufficient workpapers and supporting information to allow
13 the Commission and interested parties to understand and
14 evaluate the principal inputs, assumptions, calculations,
15 and methodological judgments underlying the results .
16 The filing should identify the applicable
17 classification and allocation treatments, explain any
18 material changes from the prior study, and demonstrate
19 reconciliation to the applicable revenue requirement.
20 VIII . Summary and Requested Commission Action
21 Q. Please summarize the action Idaho Power
22 requests from the Commission.
23 A. Idaho Power requests that the Commission:
24 1 . Establish a consistent framework for evaluating CCOS
25 methodologies;
ANDERSON, DI 25
Idaho Power Company

1 2 . Direct Idaho Power to use the Peak & Average Embedded
2 Method ("PAEM") , with the application of the Growth
3 Responsibility Method ("GRM") , to prepare the CCOS study
4 filed in the Company' s next general rate case; and
5 3 . Recognize that applying GRM within the CCOS study
6 supports implementation of Idaho Code § 61-335 .
7 PAEM would provide the embedded classification and
8 allocation framework for the study. GRM would build on that
9 framework by incorporating measured customer-class growth
10 into the allocation of identified growth-related portions
11 of applicable generation and transmission costs while
12 preserving embedded allocation treatment for all remaining
13 costs .
14 Q. Why does Idaho Power believe this direction is
15 appropriate?
16 A. Directing Idaho Power to use PAEM, with the
17 application of GRM, would provide the Company with a clear,
18 transparent, and repeatable methodology for preparing the
19 class cost-of-service study filed in its next general rate
20 case .
21 The requested direction would not preclude
22 interested parties from proposing alternative methodologies
23 or prevent the Commission from considering alternatives
24 supported by the record. It would, however, provide clarity
25 regarding Idaho Power' s filing obligation without requiring
ANDERSON, DI 26
Idaho Power Company

1 the Company to prepare and file multiple alternative CCOS
2 studies or supplemental analyses unless the Commission
3 directs otherwise or the record in the applicable
4 proceeding supports the need for an additional analysis
5 addressing a defined methodological issue .
6 Q. How does application of GRM support
7 implementation under Idaho Code § 61-335?
8 A. Application of GPM within the Company' s class
9 cost-of-service study would support implementation of Idaho
10 Code § 61-335 by providing a method for incorporating
11 measured customer-class growth into the allocation of
12 identified growth-related portions of generation and
13 transmission costs .
14 GRM addresses the allocation of identified growth-
15 related portions of generation and transmission costs
16 within the Company' s CCOS study. It recognizes both
17 measured customer-class growth and embedded cost
18 responsibility for facilities that operate as part of the
19 integrated utility system. This treatment reflects both the
20 role that customer growth may have played in the need or
21 scale of an investment and the continuing operation of that
22 investment as part of the integrated system.
23 GRM supports the statute' s requirement that a NLL be
24 responsible for its full cost of service, including its
25 share of infrastructure investments that would not be
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Idaho Power Company

1 placed in service or required but for the NLL. However, GRM
2 is only one component of that analysis . Customer-specific
3 facilities, costs, rates, service terms, and other
4 implementation matters would continue to be evaluated
5 through the applicable service contract, comprehensive cost
6 study, no-harm test, and supporting record.
7 Accordingly, GRM would not, by itself, determine
8 whether a particular NLL service contract satisfies Idaho
9 Code § 61-335 . That determination would depend on the
10 comprehensive cost study, service contract, no-harm test,
11 and supporting record applicable to the particular NLL.
12 Customer-specific facilities, costs, rates, service terms,
13 and other implementation matters should therefore be
14 resolved in the applicable proceeding.
15 Q. Does this complete your testimony?
16 A. Yes, it does .
17
ANDERSON, DI 28
Idaho Power Company

1 DECLARATION OF GRANT T. ANDERSON
2 I, Grant T . Anderson, declare under penalty of
3 perjury under the laws of the state of Idaho:
4 1 . My name is Grant T. Anderson. I am employed
5 by Idaho Power Company as a Pricing and Tariff Manager in
6 the Regulatory Affairs Department and am competent to be a
7 witness in this proceeding.
8 2 . On behalf of Idaho Power, I present this
9 pre-filed direct testimony in this matter.
10 3 . To the best of my knowledge, my pre-filed
11 direct testimony is 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 23rd day of September 2026, at Boise,
17 Idaho .
18
19 Signed: �. �h� Q/l,Qdlfi
ANDERSON, DI 29
Idaho Power Company