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Home My WebLink AboutIPUC 2022 Annual Report.pdf ANNUAL REPORT 2022 Suite 201-A Boise, ID 83714 PO Box 83720-0074 208.334.0300 www.puc.idaho.gov Idaho Public Utilities Commission Page 1 Table of Contents COMMISSIONERS ................................................................................... 4 FINANCIAL SUMMARY FUND 0229* ............................................................. 7 Fiscal Years 2018 – 2022 ......................................................................... 7 COMMISSION STRUCTURE AND OPERATIONS .................................................. 8 Administration ................................................................................... 10 Legal .............................................................................................. 11 Utilities Division ................................................................................. 11 Railroad and Pipeline Safety Section ......................................................... 12 WHY CAN’T YOU JUST TELL THEM NO? ..................................................... 13 ELECTRIC ......................................................................................... 14 WATER…………………………………………………………………………………………………………………………….20 TELECOMMUNICATIONS………………………………………………………………………………………………….24 NATURAL GAS .................................................................................... 26 CONSUMER ASSISTANCE ........................................................................ 33 REGULATING IDAHO’S RAILROADS ........................................................... 34 REGULATING IDAHO’S PIPELINES ............................................................. 35 Idaho Public Utilities Commission Page 2 Idaho Public Utilities Commission Contact us: 208-334-0300 www.puc.idaho.gov Commission Secretary 1-208-334-0338 Public Information 1-208-334-0339 Utilities Division 1-208-344-0367 Legal Division 1-208-334-0324 Rail Section and Pipeline Safety 1-208-334-0338 Consumer Assistance Section 1-208-334-0369 Outside Boise, Toll-Free Consumer Assistance 1-800-432-0369 Voice: 1-800-377-3529 Text Telephone: 1-800-368-6185 TRS Information: 1-800-368-6185 This report and all the links inside can be accessed online from the Commission’s Website at www.puc.idaho.gov. Click on “File Room,” then “Reports” from the drop down, and then on “IPUC 2022 Annual Report.” Front cover photograph courtesy of Idaho Power Company. Hells Canyon Power Plant in Hells Canyon. Idaho Public Utilities Commission Page 3 Idaho Public Utilities Commission December 1, 2022 The Honorable Brad Little Governor of Idaho Statehouse Boise, ID 83720-0034 Dear Governor Little: It is our distinct pleasure to submit to you, in accordance with Idaho Code §61-214, the Idaho Public Utilities Commission’s 2022 Annual Report. This report is a detailed description of the most significant cases, decisions and other activities during 2022. The financial report on page seven is a summary of the Commission’s budget through the conclusion of Fiscal Year 2022, which ended June 30, 2022. It has been a privilege and honor serving the people of Idaho this past year. Sincerely, Eric Anderson President, Idaho Public Utilities Commission John Chatburn Commissioner John R. Hammond, Jr. Commissioner Idaho Public Utilities Commission Page 4 COMMISSIONERS Commissioner - President Eric Anderson was appointed to his current six-year term in January 2019 by Gov. Brad Little. It is his second term on the Commission, having been initially appointed in December 2015 by former Gov. C.L. “Butch” Otter. Commissioner Anderson serves on the National Association of Regulatory Utilities Commissioners (NARUC) Committee on Water as well as its Committee on International Relations. In November 2019 Commissioner Anderson was appointed Chair of NARUC’s Committee on Water. Before joining the Commission, Anderson served five terms in the Idaho Legislature, from 2004-2014, and was chairman of the House Ways and Means Committee. As a member of the Idaho House of Representatives, Anderson served on a number of committees, including Environment, Energy and Technology, Commerce and Human Resources, Resource and Conservation, Business, and State Affairs. He also chaired a legislative Interim Subcommittee on Renewable Energy. Anderson received a Bachelor of Art degree in political science and government from Eastern Washington University. A general contractor and real estate broker, Anderson also served as director and vice president of Sandpoint- based Northern Lights Inc., an electric cooperative. He has also served as a director of the Idaho Consumer-Owned Utilities Association, the National Rural Electric Cooperative Association and the Idaho Energy Resources Authority. He is a past member to the Pacific States Marine Fisheries Advisory Council and the Pacific Northwest Economic Region’s Executive Council. Idaho Public Utilities Commission Page 5 Commissioner John Chatburn was appointed to the Commission by Governor Brad Little on January 10, 2022. Commissioner Chatburn serves on the National Association of Regulatory Commissioners (NARUC) Committee on Electricity, NARUC’s Nuclear Energy Partnership, the Western Energy Imbalance Market-Body of State Regulators, Western Interconnection Regional Advisory Body, Co-Chair of the Committee on Regional Electric Power Cooperation, and the New Mexico State University Center for Public Utilities Advisory Council. Prior to being appointed to the Commission, Chatburn served as Administrator of the Idaho Governor’s Office of Energy and Mineral Resources (OEMR) beginning in September of 2014, He had served as Interim Administrator and Program Services Manager for OEMR from 2009 - 2014. During his career with the State of Idaho John has served as the Special Assistant for Energy under Governor Otter from 2007- 2009; Deputy Administrator, for the Idaho Department of Agriculture, in the Division of Animal Industries from 2002-2007; Special Assistant to the Director, Idaho State Department of Agriculture from 1999 – 2002; and Energy and Natural Resource Policy Advisor for Governor Phil Batt, 1995 – 1998. He is a graduate of Boise State University with a Bachelor of Arts degree in Political Science. Idaho Public Utilities Commission Page 6 Commissioner John R. Hammond, Jr. was appointed to his first term with the Idaho Public Utilities Commission by Governor Brad Little in January of 2022. Prior to being appointed to the Commission, John worked for the Idaho Office of the Attorney General as a Deputy Attorney General and later as the Commission’s lead Deputy Attorney General. During his career, John also worked in private practice and was a partner at Fisher Pusch LLP in Boise for eight years. John also served a law clerk to the Honorable Terry L. Myers, United States Bankruptcy Judge, United States Bankruptcy Court, District of Idaho. John earned his Bachelor of Science from the University of Idaho and his Juris Doctorate degree from the University of Idaho School of Law. Idaho Public Utilities Commission Page 7 Fiscal Years 2018 – 202 2 Financial Summary - Fund 0229 *This summary represents assessment funded expenses only. It does not include federal or other funds. Description FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Personnel Costs 3,962,400 3,990,800 3,576,800 3,356,200 3,618,600 Communication Costs 25,000 23,100 27,500 26,000 53,500 Total Expenditures Fund 0229-20 Appropriation Fund 0229-20 Encumbrances Unexpended Balance Idaho Public Utilities Commission Page 8 COMMISSION STRUCTURE AND OPERATIONS Under state law, the Idaho Public Utilities Commission (Commission or IPUC) supervises and regulates Idaho’s investor-owned utilities – electric, gas, telecommunications and water – assuring adequate service and affixing just, reasonable and sufficient rates. The Commission does not regulate publicly owned, municipal or cooperative utilities. The Governor appoints the three Commissioners with confirmation by the Idaho Senate. No more than two Commissioners may be of the same political party. The Commissioners serve staggered six-year terms. The Governor may remove a Commissioner before his/her term has expired for dereliction of duty, corruption or incompetence. The three-member Commission was established by the 12th Session of the Idaho Legislature and was organized May 8, 1913 as the Public Utilities Commission of the State of Idaho. In 1951 it was reorganized as the Idaho Public Utilities Commission. Statutory authorities for the Commission are established in Idaho Code Titles 61 and 62. The Commission has quasi-legislative and quasi-judicial as well as executive powers and duties. In its quasi-legislative capacity, the Commission sets rates and makes rules governing utility operations. In its quasi-judicial mode, the Commission hears and decides complaints, issues written orders that are similar to court orders and may have its decisions appealed to the Idaho Supreme Court. In its executive capacity, the Commission enforces state laws and rules affecting the utilities and rail industries. Commission operations are funded by fees assessed on the utilities and railroads it regulates. Annual assessments are set by the Commission each year in April within limits set by law. The Commission president is its chief executive officer. Commissioners meet on the first Monday in April in odd- numbered years to elect one of their own to a two-year term as president. The president signs contracts on the Commission’s behalf, is the final authority in personnel matters and handles other administrative tasks. Chairmanship of individual cases is rotated among all three Commissioners. The Commission conducts its business in two types of meetings – and . Decision meetings are typically held once a week, usually on Tuesday. Idaho Public Utilities Commission Page 9 Formal are held on a case-by-case basis, sometimes in the service area of the impacted utility. These hearings resemble judicial proceedings and are recorded and transcribed by a court reporter. There are and . At technical hearings, formal parties who have been granted “intervenor status” present testimony and evidence, subject to cross-examination by attorneys from the other parties, staff attorneys and the Commissioners. At public hearings, members of the public may testify before the Commission. In 2009, the Commission began conducting to save expense and allow customers to testify from the comfort of their own homes. Commissioners and other interested parties gather in the Boise hearing room and are telephonically connected to ratepayers who call in on a toll- free line to provide testimony or listen in. A court reporter is present to take testimony by telephone, which has the same legal weight as if the person testifying were present in the hearing room. Commissioners and attorneys may also direct questions to those testifying. The Commission also conducts regular to consider issues on an agenda prepared by the Commission Secretary and posted in advance of the meeting. These meetings are usually held Tuesdays at 1:30 p.m., although by law the Commission is required to meet only once a month. Members of the public are welcome to attend decision meetings. consist of the Commission’s review of decision memoranda prepared by Commission Staff (Staff). Minutes of the meetings are taken. Decisions reached at these meetings may be either final or preliminary, but subsequently become final when the Commission issues a written order signed by a majority of the Commission. Under the Idaho Open Meeting Law, Commissioners may also privately deliberate fully submitted matters. PUC hearing room PUC headquarters 11331 W. Chinden Blvd. Building 8, Suite 201-A, Boise, Idaho 83714. Idaho Public Utilities Commission Page 10 Commission Staff OUR MISSION - Determine fair, just and reasonable rates and utility practices for electric, gas, telephone and water consumers. - Ensure that delivery of utility services is safe, reliable and efficient. - Ensure safe operation of pipelines and rail carriers within the state. To help ensure its decisions are fair and workable, the Commission employs a Staff of about 55 people – engineers, utility analysts, attorneys, auditors, investigators, economists, secretaries and other support personnel. The Staff is organized in three divisions – administration, legal and utilities. Administration The Administrative Division is responsible for coordinating overall IPUC activities. The division includes the three Commissioners, three policy strategists, a Commission secretary, an executive director, and support personnel. The are executive level positions reporting directly to the Commissioners with policy and technical consultation and research support regarding major regulatory issues in the areas of electricity, telecommunications, water and natural gas. Strategists are also charged with developing comprehensive policy strategy, providing assistance and advice on major litigation before the Commission, public agencies and organizations. The , a post established by Idaho law, keeps a precise public record of all Commission proceedings. The secretary issues notices, orders and other documents to the proper parties and is the official custodian of documents issued by and filed with the Commission. Most of these documents are public records. The has primary responsibility for the Commission’s fiscal and administrative operations, preparing the Commission budget and supervising fiscal, administration, public information, personnel, information systems, rail section operations and pipeline safety. The executive director also serves as a liaison between the Commission and other state agencies and the Legislature. The is responsible for public communication between the Commission, the general public and interfacing governmental offices. The responsibility includes news releases, responses to public inquiries, coordinating and facilitating Commission workshops and public hearings and the preparation and coordination of any IPUC report directed or recommended by the Idaho Legislature or Governor. Idaho Public Utilities Commission Page 11 Legal Five are assigned to the Commission from the Idaho Office of the Attorney General and have permanent offices at IPUC headquarters. The IPUC attorneys represent the staff in all matters before the Commission, working closely with staff auditors, engineers, investigators, utility analysts and economists as they develop their recommendations for rate case and policy proceedings. In the hearing room, IPUC attorneys coordinate the presentation of the staff’s case and cross-examine other parties who submit testimony. The attorneys also represent the Commission itself in state and federal courts and before other state or federal regulatory agencies. The Utilities Division, responsible for technical and policy analysis of utility matters before the Commission, is divided into four sections. The Staff analyzes each petition, complaint, rate increase request or application for an operating certificate received by the Commission. In formal proceedings before the Commission, the Staff acts as a separate party to the case, presenting its own testimony, evidence and expert witnesses. The Commission considers staff recommendations along with those of other participants in each case - including utilities, public, agricultural, industrial, business and consumer groups. The of six auditors and one program manager audits utility books and records to verify reported revenue, expenses and compliance with Commission orders. Staff auditors present the results of their findings in audit reports as well as in formal testimony and exhibits. When a utility requests a rate increase, cost- of-capital studies are performed to determine a recommended rate of return. Revenues, expenses and investments are analyzed to determine the amount needed for the utility to earn the recommended return on its investment. The of two engineers, two utility analysts, and one program manager reviews the physical operations of utilities. The Staff of engineers and analysts develops computer models of utility operations and compares alternative costs to repair, replace and acquire facilities to serve utility customers. The group establishes the price of acquiring cogeneration and renewable generation facilities and identifies the cost of serving various types of customers. They evaluate the adequacy of utility services and frequently help resolve customer complaints. The of four utility analysts and one program manager determines the cost effectiveness of all Demand Side Management (DSM) programs including energy efficiency and demand response. They identify potential for new DSM programs and track the impact on utility revenues. They review utility forecasts of energy, water and natural gas usage with focus on residential self-generation and rate design. Idaho Public Utilities Commission Page 12 The oversees tariff and price list filings, area code oversight, Universal Service, Lifeline and Telephone Relay Service. They assist and advise the Commission on technical matters that include advanced services, 911 and other matters as requested. The includes four division investigators and one program manager who resolve conflicts between utilities and their customers. Customers faced with service disconnections often seek help in negotiating payment arrangements. Consumer Assistance may mediate disputes over billing, deposits, line extensions and other service problems.Consumer Assistance monitors Idaho utilities to verify they are complying with Commission orders and regulations. Investigators participate in general rate and policy cases when rate design and customer service issues are brought before the Commission. The oversees the safe operations of railroads that move freight in and through Idaho and enforces state and federal regulations safeguarding the transportation of hazardous materials by rail in Idaho. The Commission’s rail safety specialists inspect railroad crossings and rail clearances for safety and maintenance deficiencies. Rail safety section helps investigate all railroad-crossing accidents and makes recommendations for safety improvements to crossings. As part of its regulatory authority, the Commission evaluates the discontinuance and abandonment of railroad service in Idaho by conducting an independent evaluation of each case to determine whether the abandonment of a particular railroad line would adversely affect Idaho shippers and whether the line has any profit potential. Should the Commission determine abandonment would be harmful to Idaho interests, it then represents the state before the federal Surface Transportation Board, which has authority to grant or deny line abandonments. The oversees the safe operation of the intrastate natural gas pipelines in Idaho. The Commission’s pipeline safety personnel verify compliance with state and federal regulations by performing on-site inspections of intrastate pipeline distribution, gathering and transmission systems. Part of the inspection process includes a review of record-keeping practices and compliance with design, construction, operation, maintenance and drug/alcohol abuse regulations. Key objectives of the program are to monitor accidents and violations, to identify their contributing factors and to implement practices to avoid accidents. All reportable accidents are investigated and appropriate reports filed with the U.S. Department of Transportation in a timely manner. Idaho Public Utilities Commission Page 13 WHY CAN’T YOU JUST TELL THEM NO? One of the most frequently asked questions the PUC receives after a utility files a rate increase application is, Actually, we can, but not without evidence. For more than 100 years, public utility regulation has been based on this between utilities and regulators: Regulated utilities agree to invest in the generation, transmission and distribution necessary to adequately and reliably serve all the customers in their assigned territories. In return for that promise to serve, utilities are guaranteed recovery of their prudently incurred expense along with an opportunity to earn a reasonable rate of return. The rate of return allowed must be high enough to attract investors for the utility’s capital- intensive generation, transmission and distribution projects, but not so high as to be unreasonable for customers. In setting rates, the Commission must consider the needs of the utility and its customers. The Commission serves the public interest, not the popular will. It is not in customers’ best interest, nor is it in the interest of the State of Idaho, to have utilities that do not have the generation, transmission and distribution infrastructure to be able to provide safe, adequate and reliable electrical, natural gas and water service. This is a critical, even life-saving, service for Idaho’s citizens and essential to the state’s economic development and prosperity. Unlike unregulated businesses, utilities cannot cut back on service as costs increase. As demand for electricity, natural gas and water grows, utilities are statutorily required to meet that demand. In Idaho recently, and across the nation, a continued increase in demand as well as a number of other factors have contributed to rate increases on a scale we have not witnessed before. It is not unusual now for Idaho’s three major investor-owned electric utilities to file annual rate increase requests. In light of these continued requests for rate increases, the Commission walks a fine line in balancing the needs of utilities to serve customers and customers’ ability to pay. When a rate case is filed, our staff of auditors, engineers and attorneys will take up to six months to examine the request. During that period, other parties, often representing customer groups, will “intervene” in the case for the purpose of conducting discovery, presenting evidence and cross-examining the company and other parties to the case. The Commission staff, which operates independently of the Commission, will also file its own comments that result from its investigation of the company’s request. The three-member Commission will also conduct technical and public hearings. Once testimony from the company, Commission Staff and intervening parties is presented and testimony from hearings and written comments is taken, all of that information is included in the official record for the case. It is only from the evidence contained in this official record that the Commission can render a decision. If the utility has met its burden of proof in demonstrating that the additional expense it incurred was 1) to serve customers and 2) , the Commission must allow the utility to recover that expense. The Commission can -- and often does -- deny recovery of some or all the expense utilities seek to recover from customers if the Commission is confident it has the legal justification to do so. Utilities and parties to a rate case have the right to petition the Commission for reconsideration. Following reconsideration, utilities or customer groups can appeal the Commission’s decision to the Idaho Supreme Court. In the end, the Commission’s job is to ensure that customers are paying a reasonable rate and are receiving adequate and reliable service and that utilities are allowed to recover their prudently incurred expenses and earn a fair rate of return. Idaho Public Utilities Commission Page 14 ELECTRIC Avista Utilities 2020 Average Number of Customers/Avg. Revenue/kwh* 350,699 Residential Customers/$0.09923 43,497 Commercial Customers/$0.10151 1,277 Industrial Customers/$0.05561 Idaho Power Company 2020 Average Number of Customers/Avg. Revenue/kwh* 484,432 Residential Customers/$0.1005 94,185 Commercial Customers/$0.0750 127 Industrial Customers/$0.0539 Rocky Mountain Power 2020 Average Number of Customers/Avg. Revenue/kwh* PacifiCorp/Rocky Mountain Power 68,786 Residential Customers/$0.1055 10,156 Commercial Customers/$0.0835 6,391 Industrial Customers/$0.0677 *The information above shows each regulated electric utility’s average number of customers per customer class and the average revenue per kilowatt-hour (kWh) for 2020. Idaho Public Utilities Commission Page 15 THE FOLLOWING ARE PRESS RELEASES FROM THE COMMISSION FOR FISCAL YEAR 2022 Atlanta Power Company Commission to hold a show cause hearing for Atlanta Power The Idaho Public Utilities Commission will hold a show cause hearing on February 23, 2022, commencing at 2:00 p.m. in the Commission Hearing Room, 11331 W. Chinden Blvd., Building 8, Suite 201-A, Boise, Idaho. Atlanta Power Company, Inc., a private utility, providing electric services to customers in Atlanta Idaho has been ordered to appear before the Commission due to several customer complaints. The purpose for the hearing can be found in The Commission has ordered Atlanta Power to appear before the Commission and show cause why the Commission should not (1) reimpose penalties on the Company resulting from a previous case, (2) impose new penalties on the Company for new and continuing violations and (3) open a new investigation into whether the Company is providing safe and adequate service to its customers. No public testimony will be taken at the hearing, and only the individual(s) summoned will present information to the Commission. The Commission may question those individuals. No cross examination by any of the parties in the case will occur. Written comments are being accepted in this case. Comments are required to be filed by e-mail unless e-mail is unavailable. To submit comments via e-mail, please visit the Commission’s webpage at puc.idaho.gov. Click on the “Consumers” tab toward the top of the page, then click on the “Case Comment Form.” Please use case number ALT-E-22-01 when filling out the form. The Idaho Public Utilities Commission will host an online, virtual public workshop and a public hearing on an application filed by Greylock Energy Holdings, LLC, an Idaho limited liability company, requesting approval of its proposed purchase of all shares of stock, assets and Certificate of Public Convenience and Necessity of Atlanta Power Company, Inc., an Idaho corporation and electric utility regulated by the Commission. Atlanta Power Company provides electricity to approximately 75 customers in and around Atlanta, Idaho. The proposed purchase agreement is asking for approval for Greylock to pay $365,000 for Atlanta Power Company. On Tuesday, Nov. 29, the Commission will host a virtual public workshop to share information on the application. The workshop will be held from 6:00 p.m. to 9:00 p.m. (MST). In addition to sharing information, Commission staff will be available to answer questions. To participate, please visit idahogov.webex.com and enter meeting number 2466 435 2419 (no space between the numbers). At the next window, please enter your name, e-mail address Idaho Public Utilities Commission Page 16 and this password: Tuesday Workshop. To participate in the workshop over the phone, please call 1-415-655- 0001, and enter meeting number 2466 435 2419. The PowerPoint presentation staff will be sharing at the workshop will be available online on Tuesday afternoon at approximately 3:00 p.m. To view the PowerPoint file on Tuesday, please visit puc.idaho.gov. It will be in the News Updates section of the page on the upper right side. On Tuesday, Dec. 13, the Commission will host a telephonic public hearing to accept testimony on the application. To participate, please call 1-415-655-0001, and enter meeting number 2459 066 3124. The hearing will be from 6:00 p.m. to 9:00 p.m. (MST). For more information on Greylock’s application, please visit: puc.idaho.gov/case/Details/6943. Commission issues order regarding topics/issues to be included in Idaho Power Company on-site generation study The Idaho Public Utilities Commission on Thursday issued an order that determines the topics and issues that will be covered in a comprehensive study that examines the costs, benefits and compensation of excess energy that is generated by Idaho Power customers who produce on-site generation. In Order No. 34509, issued on Dec. 20, 2019, the Commission directed Idaho Power to prepare and file a credible and fair study of the costs and benefits of distributed on-site generation to Idaho Power’s system. The order that the Commission issued Thursday, Dec. 30, 2021, moves the study process forward by listing the topics and issues that will be covered in the study. Idaho Power expects to complete the study design phase of this process in the first half of 2022 so that it can begin the study review phase in the second half of 2022. An on-site generation program allows Idaho Power customers to pay an independent contractor to have solar panels or other systems installed on their homes or property and then receive credit from Idaho Power for the surplus energy they deliver to the company. On Dec. 20, 2019, the Commission granted legacy treatment to customers who had installed, or submitted an application to install with a financial commitment, an on-site generation system under Schedules 6 and 8 (Case No. IPC-E-18-15, Order No. 34509.) Customers in Schedule 6 and Schedule 8 are residential and small general service customers. Schedule 84 defines the terms for commercial, industrial, and irrigation customers who are participating in on-site generation. In Case No. IPC-E-20-26, Order No. 34854, customers in this schedule were given legacy treatment under the same conditions as customers in Schedules 6 and 8 above. The primary objective of the on-site generation study and corresponding modifications to the program is to establish a sustainable on-site generation program that is fair and equitable. Ideally, the parameters of the program should minimize or eliminate cross-subsidies that could exist between participants and non-participants of on-site generation. The Commission’s final order and directives regarding the study were informed by Idaho Power, Commission Staff, fourteen intervening parties, and over 250 public commenters to this case. Idaho Public Utilities Commission Page 17 To view the Commission’s order, please visit: puc.idaho.gov/case/Details/6718. Idaho Public Utilities Commission staff will host two online, virtual public workshops in early September to share information on Idaho Power’s net-metering study, which examines the costs, benefits and compensation of excess energy that is generated by Idaho Power customers who produce on-site generation. In June of 2022, Idaho Power completed the Value of Distributed Energy Resources Study, or VODER study of its on-site generation program. The program allows Idaho Power customers to pay an independent contractor to have solar panels or other systems installed on their homes or property and then receive credit from Idaho Power for the surplus energy they deliver to the company. The first workshop is on Tuesday, Sept. 6, from 7:00 p.m. to 9:00 p.m. (MDT). Those wishing to participate online can visit idahogov.webex.com, and enter meeting number 2461 943 8931. At the next window, please enter your name, e-mail address and this password: 0906Workshop. To participate over the phone, please call 1-415-655- 0001 and enter meeting number 2461 943 8931 when prompted. Commission staff will be available to answer questions about the study, and Idaho Power representatives may be available. The second workshop is on Wednesday, Sept. 7, beginning at 12:30 p.m. (MDT). Those wishing to participate online can visit idahogov.webex.com, and enter meeting number 2456 391 6010 when prompted. At the next window, please enter your name, e-mail address and this password: 0907Workshop. To participate over the phone, please call 1-415-655-0001 and enter meeting number 2456 391 6010 when prompted. Commission staff will be available to answer questions about the study, and Idaho Power representatives may be available. Verbal testimony or formal comments will not be accepted at the workshops. The Commission will schedule public hearings at a later date this year to accept testimony that will become part of the formal record. Idaho Power is hosting a virtual public workshop on Wednesday, Aug. 31, at 6:00 p.m. (MDT). The company will provide an overview of the VODER study, and respond to questions. To participate online, please visit idahopower.webex.com, and enter meeting number 2595 239 8045. At the next window, please enter your name, e-mail address and this password: August Workshop (2 848 7896 from phones). Previous orders from the Commission led to the creation of the VODER study. On Dec. 20, 2019, the Commission directed Idaho Power to prepare and file a credible and fair study of the costs and benefits of distributed on- site generation to Idaho Power’s system. On Dec. 30, 2021, the Commission issued an order that determined specific topics and issues to be covered in the study. Also on Dec. 20, 2019, the Commission granted legacy treatment to residential and small general service customers who had installed, or submitted an application to install with a financial commitment, an on-site generation system under Schedules 6 and 8 (Case No. IPC-E-18-15, Order No. 34509.) Customers in Schedule 6 and Schedule 8 are residential and small general service customers. Idaho Public Utilities Commission Page 18 Schedule 84 defines the terms for commercial, industrial, and irrigation customers who are participating in on-site generation. In Case No. IPC-E-20-26, Order No. 34854, customers in this schedule were given legacy treatment under the same conditions as customers in Schedules 6 and 8 above. Idaho Power said the primary objective of the on-site generation study and corresponding modifications to the program is to establish a sustainable on-site generation program that is fair and equitable. Ideally, as Idaho Power represents, the parameters of the program should minimize or eliminate cross-subsidies that could exist between participants and non-participants of on-site generation. To learn more about the VODER study, please visit: puc.idaho.gov/case/Details/6879. The Idaho Public Utilities Commission will host three public hearings to take testimony on a net-metering study conducted by Idaho Power to examine the costs, benefits and compensation of net-excess energy associated with customer on- site generation. In June of this year, Idaho Power released the Value of Distributed Energy Resources, or VODER study of its on- site generation program. The program allows Idaho Power customers to pay an independent contractor to have solar panels or other systems installed on their homes or property and then receive credit from the utility for the surplus energy they deliver to it. The hearings are an opportunity for the public to submit testimony that will become part of the record. The first public hearing will be Thursday, Oct. 27, from 6:00 p.m. to 9:00 p.m. at the Red Lion Hotel in Pocatello, 1555 Pocatello Creek Road. Those attending in-person will have the opportunity to submit testimony. People may also listen to the testimony by calling 1-415-655-0001 and entering meeting number 2460 338 6337. The second hearing will be Wednesday, Nov. 2, from 6:00 p.m. to 9:00 p.m. in the auditorium at the Vera C. O’Leary Middle School in Twin Falls, 2350 Elizabeth Boulevard. Those attending in-person will have the opportunity to submit testimony. People may also listen to the testimony by calling 1-415-655-0001 and entering meeting number 2455 251 2587. The third hearing will be on Thursday, Nov. 3, from 6:00 p.m. to 9:00 p.m. at the Idaho Public Utilities Commission, 11331 W. Chinden Boulevard, Building 8, Suite 201-A. Those attending in-person will have the opportunity to submit testimony. People may also listen to the testimony by calling 1-415-655-0001 and enter meeting number 2454 163 5014. Those calling in won’t be able to submit testimony, but will be able to listen. Previous orders from the public utilities Commission led to the creation of the VODER study. On Dec. 20, 2019, the Commission directed Idaho Power to prepare and file a credible and fair study of the costs and benefits of Idaho Public Utilities Commission Page 19 distributed on-site generation to Idaho Power’s system. On Dec. 30, 2021, the Commission issued an order that determined specific topics and issues to be covered in the study. Also on Dec. 20, 2019, the Commission granted legacy treatment to customers who had installed, or submitted an application to install with a financial commitment, an on-site generation system under Schedules 6 and 8 (Case No. IPC-E-18-15, Order No. 34509.) Customers in Schedule 6 and Schedule 8 are residential and small general service customers. Schedule 84 defines the terms for commercial, industrial, and irrigation customers who are participating in on-site generation. In Case No. IPC-E-20-26, Order No. 34854, customers in this schedule were given legacy treatment under the same conditions as customers in Schedules 6 and 8 above. The primary objective of the on-site generation study and corresponding modifications to the program is to establish a sustainable on-site generation program that is fair and equitable. Ideally, the parameters of the program should minimize or eliminate cross-subsidies that could exist between participants and non-participants of on-site generation. Idaho Public Utilities Commission Page 20 WATER Regulated water companies Company Customers Nearest city/town Algoma Water Company 27 Sand Point Aspen Creek 47 Fish Haven Bitterroot Water System, Inc. 160 Coeur d'Alene Capitol Water 2,941 Boise CDS Stoneridge Utilities, LLC 375 Blanchard Falls Water Company, Inc. 6,193 Ammon Gem State Water 547 Coeur d'Alene Grouse Point Water 24 Kuna Happy Valley Water System 27 Athol Island Park Water Company 362 Island Park Kootenai Heights Water System, Inc. 11 Kootenai Mayfield Springs Water Company 101 Kuna Morning View Water Company, Inc. 118 Rigby Picabo Livestock Company 35 Picabo Ponderosa Terrace Estates Water System, Inc. 22 Sandpoint Resort Water Company 449 Sandpoint Rocky Mountain Utility Company, Inc. 112 Rigby Schweitzer Basin Water LLC 464 Sandpoint Sunbeam Water Company 22 American Falls Teton Water and Sewer Company, LLC 297 Driggs Veolia Idaho 101,206 Boise Idaho Public Utilities Commission Page 21 THE FOLLOWING ARE PRESS RELEASES FROM THE COMMISSION FOR FISCAL YEAR 2022 SUEZ Water Idaho (now known as Veolia Idaho) Commission approves proposed settlement agreement allowing SUEZ Water Idaho to acquire Eagle Water Company The Idaho Public Utilities Commission has approved a settlement agreement that spells out the terms allowing SUEZ Water Idaho to acquire the assets of Eagle Water Company. The Commission found that the asset acquisition and settlement are in the public interest, and that customers of both utilities will benefit from the acquisition. For SUEZ customers, the acquisition allows SUEZ to prospectively avoid about $11.2 million in future water supply and other expenses. For Eagle Water customers, SUEZ represents a capable system operator with access to capital that can be invested in much-needed system upgrades. SUEZ said it plans to make $14.6 million in capital improvements in the Eagle Water system during the next five years. Improvements include interconnecting to the Redwood Creek pipeline, building a new two-million-gallon water storage tank, adding a supervisory control and data acquisition system to allow 24-hour monitoring of the Eagle Water system to better control pumping operations, addressing delayed investment in safety upgrades, security investments, well cleaning, and distribution piping replacements. SUEZ will be entitled to an acquisition adjustment amount of $10,475,000 to be amortized over 40 years beginning at the implementation of rates in its next rate case. The approved settlement agreement also directs Eagle Water to refund approximately $592,020 to existing customers of the utility. The refund is intended to offset all or part of a first-year rate increase for existing Eagle Water customers who were customers on the day the acquisition was approved by the Commission, Dec. 9. The Commission approved a seven-year phased increase in rates for existing Eagle Water customers. Beginning Jan. 1, 2022, existing Eagle Water customers’ rates will be set at 50 percent of SUEZ’s approved rates. Each year thereafter on Jan. 1, existing customers’ phase-in rates will increase by approximately 8.33 percent until their rates are 100 percent of SUEZ’s approved rates. The rate increase for existing Eagle Water customers will follow this progression: Jan. 1, 2022 – 50 percent Jan. 1, 2023 – 58.33 percent Jan. 1, 2024 – 66.67 percent Jan. 1, 2025 – 75 percent Jan. 1, 2026 – 83.33 percent Jan. 1, 2027 – 91.67 percent Idaho Public Utilities Commission Page 22 Jan. 1, 2028 – 100 percent The seven-year phase-in is only available to existing Eagle Water customers. New customers starting service or connecting to service in the present Eagle Water service territory will pay current SUEZ rates when beginning service. The Commission found the rates across the seven-year schedule to be just, reasonable and in the public interest. Because of the transaction, Eagle Water customers will receive water service that meets standards set by state regulatory agencies and enhanced customer service. SUEZ, Eagle Water, and Commission Staff signed the settlement agreement that was approved by the Commission. Other parties involved in settlement negotiations did not sign on to the agreement. For additional information on the approved settlement and the case, please visit: puc.idaho.gov/case/Details/3610. The Idaho Public Utilities Commission is holding a public workshop on Nov. 15 to share information regarding an application from Gem State Water Company to change its rates for water service. The workshop will be held from 6:00 p.m. to 9:00 p.m. Pacific Time at the Molstead Library building’s Todd Lecture Hall on the North Idaho College Campus, 1000 West Garden Avenue, Coeur d’Alene. If the application is approved by the Commission, monthly rates for customers would change based on the diameter of their water meter and the water system they belong to. For example, Spirit Lake East customers (including customers formerly of the Lynnwood Estates Subdivision, would see a monthly increase from $25.55 to $35.00. Bar Circle “S” customers (including customers formerly of Diamond Bar), would see a decrease from $41.00 per month to $35.00 per month. This is the first general rate case for Gem State Water. The utility consists of Bitterroot Water Company, Bar Circle “S” Water Company, Spirit Lake East Water, Happy Valley Water Systems, Troy Hoffman Water Corporation, Diamond Bar Estates and Lynnwood Estates Subdivision. Rate increases were approved for individual companies from 2006 through 2019. Gem State requested an effective date of Sept. 1, 2022. This was suspended by Order No. 35498, which said the proposed rate changes were suspended for 30 days plus five months or until the public utilities Commission issues an earlier order accepting, rejecting, or modifying the proposed rate changes. The rate changes would increase Gem State’s revenue by $402,000, which represents an increase of 69.9 percent. The public utilities Commission may approve, reject, or modify the proposed rates and charges and may find rates and charges different from those proposed are just, fair and reasonable. Idaho Public Utilities Commission Page 23 For more information on Gem State Water’s application, please visit: https://puc.idaho.gov/case/Details/6894. Idaho Public Utilities Commission Page 24 TELECOMMUNICATIONS Regulated telecommunications companies Company Location Albion Telephone Corp. Albion Cambridge Telephone Co. Cambridge CenturyLink* Boise CenturyTel of Idaho, Inc.* Salt Lake City, UT CenturyTel of the Gem State* Salt Lake City, UT Citizens Telecommunications Company of Idaho* Beaverton, OR Columbine, dba Silver Star Communications Direct Communications Rockland, Inc. Fremont Telecom, Inc. Frontier Communications Northwest, Inc.* Inland Telephone Co. Midvale Telephone Company Oregon-Idaho Utilities, Inc. Pine Telephone System, Inc. Potlach Telephone Company* Rural Telephone Company * These companies are no longer rate regulated; however, they are still regulated for customer service. Idaho Public Utilities Commission Page 25 THE FOLLOWING ARE PRESS RELEASES FROM THE COMMISSION FOR FISCAL YEAR 2022 TELECOMMUNICATIONS CASES Broadband Tax Credit In January 2022 The Idaho Public Utilities Commission issued a new order that provide further clarifications regarding what information a taxpayer must include when applying to the Commission for an order that its installed equipment meets the statutory definition of “qualified broadband equipment”. This new order took effect in January 21,2022 as it superseded the previous order that was issued in 2001. For more information on the Commission’s decision, please visit: Case Details - IPUC (idaho.gov) 35297.pdf (idaho.gov) The Idaho Public Utilities Commission has accepted the 2021 annual report and the 2022 budget for the Idaho Telecommunications Relay Service. The relay service, established by the Idaho Legislature in 1992, allows hearing- or speech impaired residents to use phone communications “in a manner that is functionally equivalent to individuals without hearing or speech impairments.” A relay center is used, which converts or relays verbal conversations to text-type and vice versa. The relay center also provides speech-to-speech, Spanish-to-Spanish, video, and Internet relay services. The Commission approved the 2021 annual report and 2022 budget on April 22. The 2022 operating budget is projected at $142,350. This budget includes the anticipated administrative costs as contracted, the travel/conference costs, the Hamilton TRS payments, and NASRA membership dues. Hamilton Telecommunications operated the relay center and submitted the report and budget to the Idaho Public Utilities Commission. The relay service is funded by assessments on local residential and business telephone service access lines and on billed intrastate long-distance minutes. In-state relay traffic and captioned telephone services are reimbursed by the fund, while the firm of Rolka Loube Saltzer Associates, LLC reimburses Hamilton for interstate calls. For more information on the Commission’s decision, please visit: https://puc.idaho.gov/Fileroom/PublicFiles/telecom/35378.pdf BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION Idaho Public Utilities Commission Page 26 NATURAL GAS Consumption and prices increased in FY20221 In Idaho, natural gas is supplied to customers by Avista Corporation, Dominion Energy, and Intermountain Gas Company. Idaho is fortuitous to be located between two large natural gas producing basins: The Rocky Mountain Basin (Rockies) and the Western Canadian Sedimentary Basin (WCSB). These basins are connected through the Williams Northwest Pipeline and TransCanada’s GTN pipelines allowing the natural gas utility companies serving Idaho to take advantage of capacity and of pricing at both basins. Individual Idaho Gas Utility Profiles FY 2022 Statistics Total Residential Commercial Industrial Transportation2 Avista Corporation Customers 91,543 82,007 9,459 69 8 Dominion Questar Gas Customers 2,460 2,197 261 0 2 Intermountain Gas Customers 403,825 368,503 35,180 33 109 1 The Idaho Public Utilities Commission’s fiscal year is July 1st through June 30th. 2 Transportation is nonutility owned gas transported for another party under contractual agreement. Idaho Public Utilities Commission Page 27 Consumption In 2021, overall consumption of natural gas in Idaho increased approximately 2.3 percent. Residential customers consumed roughly 0.3 percent more and commercial customers consumed roughly 2 percent more natural gas than the previous year. Industrial consumption decreased approximately 1.3 percent and consumption of gas for electric generation increased just under 10 percent. Use of natural gas as a vehicle fuel increased slightly and remains less than 1 percent of overall consumption in the state. Idaho Public Utilities Commission Page 28 Demand The Northwest Gas Association (“NWGA”) forecasts demand for natural gas in the Northwest to grow at a rate of approximately 0.2 percent per year.3 Forecast demand growth is 1 percent in the residential and 1.4 percent commercial sectors, while industrial demand growth is relatively flat at 0.2 percent per year growth. Demand for natural gas to generate electricity is forecast to drop -1.7 percent per year primarily due to policy mandates. Several factors could impact demand for natural gas: • Geopolitical issues and worldwide market demands. • LNG and petrochemical production and exports. • Energy policies, regulations, and legislation. Prices Over the last decade, the commodity price of natural gas has continued to decline (see Figure 1). However, near- term volatility resulted in higher prices in 2021. Regional natural gas spot prices are projected to remain below $5/dekatherm (“Dth”) through at least 2040; depending on the source, some prices are forecast to remain below $4/Dth through 2050. 3 Northwest Gas Association 2022 Pacific Northwest Gas Market Outlook Idaho Public Utilities Commission Page 29 FIGURE 1. Idaho Historical Natural Gas Price Idaho Public Utilities Commission Page 30 Production There was approximately 1331 Mcf of natural gas produced by the Snake River Oil and Gas Group in Idaho in 2021.4 In years prior to 2019, gas was produced by Alta Mesa/High Mesa. Snake River Oil and Gas Group purchased Alta Mesa/High Mesa wells and production facilities in December 2019. Renewable Natural Gas (RNG) RNG is pipeline-quality biomethane produced from biogas. Biogas is the mixture of gases produced by the breakdown of organic matter in the absence of oxygen (anaerobically), primarily consisting of methane and carbon dioxide. It can be produced from raw materials such as agricultural waste, manure, municipal waste, plant material, sewage, or food waste. It is interchangeable with natural gas and compatible with the U.S. natural gas infrastructure. In the past, RNG projects in the state consumed gas produced in their operations or used the gas to generate electricity. A number of biomass operations in the state have capabilities to produce sufficient volumes of RNG for export onto pipeline infrastructure. On a per therm basis, RNG is more expensive to produce than traditional natural gas. Given current State and Federal Government policies and programs some RNG projects have the potential to achieve profitability. Some natural gas utility companies in the state are facilitating the transportation of RNG and the growth of the RNG industry. Producers contract to use the utility’s distribution system to move RNG from the producers to their end use customers. The utilities are monitoring RNG production activity and government policies as they continue to look for opportunities to participate in the development and expansion of this resource. 4 Source EIA Natural Gas Summary https://www.eia.gov/dnav/ng/ng_sum_lsum_dcu_SID_a.htm Idaho Public Utilities Commission Page 31 Summary Idaho residential, commercial, industrial, and transportation users of natural gas realized benefits from availability of natural gas and relatively low prices, this fiscal year. Price volatility and lower than average natural gas inventories are contributing to market fluctuations. It is anticipated that domestic natural gas production will outpace LNG exports in the second calendar quarter of 2022 reducing volatility and putting downward pressure on prices. -by Kevin Keyt, IPUC Staff Analyst Idaho Public Utilities Commission Page 32 THE FOLLOWING ARE PRESS RELEASES FROM THE COMMISSION FOR FISCAL YEAR 2022 Intermountain Gas Company Commission approves Intermountain Gas application to increase rates for residential and commercial customers On July 29, 2022, the Idaho Public Utilities Commission approved new Intermountain Gas Company rate schedules through an interim Purchased Gas Cost Adjustment (PGA) that increases rates for natural gas service for residential customers by approximately 24.1 percent and rates for commercial customers by approximately 27 percent. The rate increases started on Aug. 1, 2022. Residential customers’ monthly bills will increase by an average of $10.55 and commercial customers’ bills will increase by an average of $51.87, depending on the amount of natural gas they use. In total, annualized revenues for the Company will increase by $67 million. The customer rate increases will not increase the Company’s earnings. The PGA is a Commission-approved mechanism that adjusts rates up or down to reflect changes in the costs for the Company to buy natural gas from suppliers – including changes in transportation, storage and other costs. Intermountain Gas defers those costs into its purchased gas cost adjustment account, then passes the costs on to customers through a rate increase or decrease. Intermountain Gas asked for permission to pass through to each of its customer classes changes in gas-related costs resulting from an increase in its weighted average cost of gas, and received approval to increase the cost from $0.26000 per therm to $0.42405 per therm. Intermountain Gas said the primary drivers of the proposed increase include macroeconomic forces and geopolitical events that are increasing the price of wholesale natural gas. Intermountain Gas also asked for permission to increase its line break rate increase from $0.42443 per therm to $0.58848 per therm for parties responsible for damage that causes a gas leak. Staff with the Idaho Public Utilities Commission reviewed the application and recommended that the Commission approve it. Although the Commission approved Intermountain Gas’s requested PGA rate increases, it encouraged the Company to explore all options to reduce future increases. For additional information on the application, please visit https://puc.idaho.gov/case/Details/6863. Idaho Public Utilities Commission Page 33 CONSUMER ASSISTANCE Commission issues annual consumer assistance report The Consumer Assistance staff responded to 1,079 complaints and inquiries in fiscal year 2022, 90 percent of which were from residential customers. The chart below illustrates the complaints and inquiries by industry. The chart below summarizes the types of issues reported to the Commission. While the Consumer Assistance staff is able to respond to most inquiries without extensive research, about 60 percent of complaints required investigation by the staff. Approximately 57 percent of investigations resulted in reversal or modification of the utility’s original action. Payment terms were negotiated in 13 percent of the investigations. Idaho Public Utilities Commission Page 34 REGULATING IDAHO’S RAILROADS The Commission conducts inspections of Idaho’s railroads to determine compliance with state and federal laws, rules and regulations concerning the transportation of hazardous materials, locomotive cab safety and sanitation rules, and railroad/highway grade crossings. Hazardous material inspections are conducted in rail yards. In 1994, Idaho was invited to participate in the Federal Railroad Administration’s State Participation Program. The Commission has a State Program Manager and one FRA certified hazardous material inspector. The Commission inspects railroad-highway grade crossings where incidents occur, investigates citizen complaints of unsafe or rough crossings and conducts railroad-crossing surveys. The Commission also plays a role when rail lines are abandoned. More than 900 miles of railroad track in Idaho have been abandoned since 1976. Federal law governs rail line abandonments, and the federal Surface Transportation Board (STB. formerly the Interstate Commerce Commission) decides the final outcome of abandonment applications. Under Idaho law, however, after a railroad files its federal notice of intent to abandon, the Idaho Commission must determine whether the proposed abandonment would adversely affect the public interest. The Commission then reports its findings to the STB. In reaching a conclusion, the Commission considers whether abandonment would adversely affect the service area, impair market access or access of Idaho communities to vital goods and services, and whether the line has a potential for profitability. Railroad Activity Summary Rail Safety Category Totals Idaho Railroad Track Miles 1710/996 Class I * Hazmat Inspections 288 Rail Cars inspected 9096 Railcar Violations 12 Railcar Defects 384 Railroad Grade Crossings Inspected 346 Crossing Accidents Investigated 27 Crossing Complaints Investigated 5 Crossing Complaints Validated 3 Locomotives Inspected 4 Locomotive defects 1 *Source: ITD `(2017) Idaho Public Utilities Commission Page 35 REGULATING IDAHO’S PIPELINES Idaho Code 61-515 empowers the Commission to require every utility to “maintain and operate its line, plant, system, equipment, apparatus, and premises in such a manner that promote and safeguard the health and safety of its employees, customers and the public.” Pursuant to 49 U.S.C Section 60105, Chapter 601, the Commission is a certified partner with the U.S. Department of Transportation Pipeline Hazardous Material Safety Administration. The federal/state partnership provides the statutory basis for the pipeline safety program and establishes a framework for promoting pipeline safety through federal delegation to the states for all or part of the responsibility for intrastate natural gas pipeline facilities under annual certification. Under the certification, Idaho assumes inspection and enforcement responsibility with respect to more than 8,300 miles of intrastate natural gas pipelines over which it has jurisdiction under state law. With the certification, Idaho may adopt additional or more stringent standards for intrastate pipeline facilities provided the standards are compatible with federal regulations. The Idaho Commission has a state program manager and two trained and certified pipeline safety inspectors who conduct records audits and field installed equipment inspections on all intrastate natural gas pipeline operators under its jurisdiction. Pipeline Summary Activity Regulating Idaho's Pipeline Standard Inspection Days 124 Compliance Inspection Days 3.5 Damage Prevention Inspection Days 2.5 Construction Inspection Days 93.5 Operator Qualification Inspection Days 11 Integrity Management Program Inspection Days 18.5 Incident/Accident Inspection Days 2.5 Operator Training Inspection Days 1 Compliance Enforcement Actions Notice of Probably Violation 5 Notice of Amendment 0 Warning Letters 0 Idaho Public Utilities Commission Page 36 This report satisfies Idaho Code 61-214; this is a “full and complete account” of the most significant cases to come before the Commission during the 2022 calendar year. (The financial report on Page 7 covers Fiscal Year July 1, 2018 through June 30, 2022.) Anyone with access to the Internet may also review the Commission’s agendas, notices, case information and decisions by visiting the IPUC’s Web site at: www.puc.idaho.gov. Commission records are also available for public inspection at the Commission’s Boise office, 11331 W. Chinden Blvd., Monday through Friday, 8 a.m. to 5 p.m. The Idaho Public Utilities Commission, as outlined in its Strategic Plan, serves the citizens and utilities of Idaho by determining fair, just and reasonable rates for utility commodities and services that are to be delivered safely, reliably and efficiently. During the period covered by this report, the Commission also had responsibility for ensuring all rail services operating within Idaho do so in a safe and efficient manner. The Commission also has a pipeline safety section that oversees the safe operation of the intrastate natural gas pipelines and facilities in Idaho.