20231218Compliance Filing 2022.pdf

MATTHEW T. LARKIN
Revenue Requirement Senior Manager
[e-mail]

December 18, 2023

VIA ELECTRONIC FILING

Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074

Re: Case No. IPC-E-12-09
Compliance Filing – Boardman Power Plant Annual Review (2022)

Dear Commission Secretary:

Pursuant to Idaho Public Utilities Commission (“Commission”) Order Nos. 32457
(Case No. IPC-E-11-18) and 32549 (Case No. IPC-E-12-09), attached for electronic filing
is Idaho Power Company’s Boardman Power Plant Annual Review report for the year
ending 2022.

If you have any questions regarding this filing, please contact Regulatory
Consultant Courtney Waites at [phone] or [e-mail].

Sincerely,

Matthew T. Larkin

MTL:sg
cc: Dayn Hardie
RECEIVED
2023 DECEMBER 18, 2023 4:56PM
IDAHO PUBLIC
UTILITIES COMMISSION
1
BOARDMAN POWER PLANT ANNUAL REVIEW
FOR THE YEAR ENDING 2022
December 18, 2023
Pursuant to Idaho Public Utilities Commission (“Commission”) Order Nos. 32457 (Case No. IPC-
E-11-18) and 32549 (Case No. IPC-E-12-09), Idaho Power Company (“Idaho Power” or “Company”) has
completed its review of the Boardman power plant (“Boardman”) balancing account for 2022. The
purpose of this report is to provide the Commission with (1) an update of the Boardman balancing account
levelized revenue requirement and (2) a summary of activities that occurred at Boardman in 2022. The
Company is not recommending a rate change as part of this report.
I. BACKGROUND
In February 2012, the Commission issued Order No. 32457 in Case No. IPC-E-11-18: (1)
accepting the Company’s accounting and cost recovery plan for the early shutdown of Boardman and (2)
allowing the Company to establish a balancing account to track shutdown-related costs and benefits.
Following the Commission’s order, on February 15, 2012, Idaho Power requested authority to increase
rates to begin recovery of the levelized revenue requirement associated with Boardman beginning June
1, 2012 (Case No. IPC-E-12-09). The Company proposed to replace the then current non-levelized base
rate revenue recovery associated with Idaho Power’s existing investment in Boardman with a levelized
revenue requirement that was tracked in the Boardman balancing account, smoothing the revenue
requirement impacts of the early Boardman retirement over the remaining years of the plant’s life and
providing for full recovery of Boardman-related costs by Boardman life end.
The levelized revenue requirement calculation included three components: (1) the revenue
requirement on existing investments as of May 31, 2012, prior to when the Boardman balancing account
was established; (2) the revenue requirement on incremental investments after May 31, 2012, after the
Boardman balancing account was established; and (3) the revenue requirement associated with future
decommissioning and offsetting salvage costs. The Commission issued Order No. 32549 on May 17,
2012, authorizing implementation of the cost recovery approach approved in Order No. 32457 and
increasing the Company’s annual revenue requirement by $1,525,501 effective June 1, 2012, to reflect
in customer rates the new levelized Boardman revenue requirement of $5,174,794.
In accordance with Order Nos. 32457 and 32549, Idaho Power filed its Boardman Power Plant
Annual Review each year from 2012 through year-end 2018 without requesting to adjust rates. Then, on
October 17, 2019, Idaho Power filed an application in Case No. IPC-E-19-32 requesting to decrease
customer rates $1,058,225 effective January 1, 2020, to reflect the updated Boardman levelized revenue
requirement amount of $5,135,872. On December 26, 2019, the Commission issued Order No. 34519 in
Case No. IPC-E-20-32 approving the requested rate change. Because full depreciation of all Boardman
investments was to occur December 31, 2020, Idaho Power filed a request with the Commission to
remove the $5,135,872 in Boardman levelized revenue requirement amounts, less an adjustment of
$213,918 to reflect benefits of the U.S. Tax Cuts and Jobs Act of 2017 associated with Boardman that
will no longer exist, effective January 1, 2021. The Commission approved the Company’s request with
Order No. 34885.
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Boardman Power Plant 2022 Annual Review
Case No. IPC-E-12-09

II. SUMMARY OF ACTIVITIES IN 2022

Boardman produced its last megawatt of energy on October 15, 2020, at 12:56 PM. In the
Company’s Boardman Power Plant Annual Review for the Year Ending 2020, Idaho Power provided the
updated quantification of the levelized revenue requirement based on actuals through the plant’s end-of-
life. Therefore, no update to the levelized revenue requirement is required. The following summarizes
the activities related to cessation of coal-fired operations at Boardman that occurred in the year 2022:

Decommissioning and Salvage Costs

Idaho Power’s initial estimate of the decommissioning and salvage costs was determined by
applying the Company’s 10 percent ownership percentage to the decommissioning study performed by
Black & Veatch for Portland General Electric (“PGE”) and completed in 2011. In 2018, PGE issued a
request for proposal seeking an Owner’s Engineer to complete design and permitting work in preparation
for decommissioning activities, including capping the ash disposal area, demolishing structures at
Boardman (i.e., coal handling systems), remediating the coal yard, and other selective demolition work
across the site (i.e., support buildings, features supporting coal, coal handling, and coal ash handling).
The cost study prepared by AECOM Technical Services, the Updated Boardman Coal Plant
Decommissioning and Demolition Plan dated October 16, 2019, indicates a slightly higher
decommissioning cost forecast than the estimate prepared in 2011, however no changes were made to
the $5.4 million of decommissioning and salvage costs included in the levelized revenue requirement and
collected from customers.

Decommissioning and Demolition Activities

Decommissioning of the Boardman plant and separating of the facilities shared with PGE’s Carty
generating station began on October 16, 2020. At this time the plant was taken to a cold, dark and dry
state in preparation of demolition until the first quarter of 2021 when decommissioning activities began.
In 2022, over 1,260 tons of asbestos were abated and removed from the site, less than initially estimated.
Lead paint abatement commenced and is expected to be complete in 2023. In addition, over 1,400 tons
of oil, chemicals, and waste were removed from the equipment, storage and containment areas.

Demolition across the site continued, including the coal yard (see Appendix Picture 1), coal
handling systems, ash handling system (see Appendix Pictures 2 and 3), precipitator, administration
building, power block (see Appendix Picture 4), and turbine building (see Appendix Picture 5). The
stacker-reclaimers in the coal yard were also demolished, along with pulling down all the elevated coal
conveyors that delivered coal from the coal yard to the plant. In September 2022 the stack and boiler
were imploded. Crews continue to remove the material from the site. Work to remove the remaining
bottom fly ash that was contained in the fly ash storage dome (see Appendix Picture 6), in accordance
with the Environmental Protection Agency requirements, continues. Over 25,360 tons of material have
been scrapped and removed from the site, including the generation step-up transformers that were
unable to be sold due to lack of interest from potential buyers. At the end of 2022, 91 percent of the plant
material was able to be recycled.

Asset Purchase Agreement

Under the terms of the 1976 Agreement for Construction, Ownership and Operation of the
Number One Boardman Station on Carty Reservoir (“Ownership Agreement”), Boardman’s end-of-life
requires the parties to enter into good faith negotiations on a decommissioning agreement and requires
the real property (e.g., land and water rights) to revert to PGE while crediting Idaho Power for its share of
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Boardman Power Plant 2022 Annual Review
Case No. IPC-E-12-09
the value associated with the real property. Consistent with these requirements, PGE and Idaho Power
have undertaken good faith negotiations and reached an agreement for the remaining Boardman assets
to be conveyed and assigned between PGE and Idaho Power, and as a result, on April 29, 2022, entered
into an Asset Purchase Agreement (“APA”), included as Attachment 1.
Under the APA, the following will occur: (1) Idaho Power agrees to convey and assign to PGE
100 percent of Idaho Power’s ownership interests in and obligations of the Shared Facilities, the
Boardman real property (inclusive of water rights), and transmission lines in accordance with the Bill of
Sale (included as Exhibit 6 to the APA), (2) PGE agrees to convey and assign to Idaho Power 100 percent
of PGE’s ownership interest in and obligations under the Idaho Power tangible property, and (3) Idaho
Power agrees to convey and assign to PGE 100 percent of Idaho Power’s ownership interest in and
obligations under the PGE tangible and intangible property. Detailed descriptions of these assets are
included in Exhibit 5 of the APA. Payment to be made by PGE to Idaho Power for the conveyance and
assignment of these assets is summarized in Table 1 below. Note, the final total payment will be
determined at closing to reflect the then-current net book value of the transmission lines.
Table 1. PGE Payment to Idaho Power for the Conveyance and Assignment of Certain Boardman
Project Assets Between the Owners
Under Oregon statute,1 PGE and Idaho Power must obtain approval from the Public Utility Commission
of Oregon for the conveyance of assets defined in the APA. Therefore, on June 30, 2022, the parties filed
a Joint Application for the sale and purchase of certain Boardman assets.2 The case is currently pending.
1 Oregon Revised Statute (“ORS”) 757.480 and ORS 757.485.
2 Docket UP 419.
* Prices will be adjusted to the
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Boardman Power Plant 2022 Annual Review
Case No. IPC-E-12-09

Boardman Balancing Account

The following summarizes Idaho Power’s share of the decommissioning expenditures recorded to the
balancing account on a system basis as of December 31, 2022:

Decommissioning Costs $2,290,152
Materials and Supplies Write-off $ 942,704
Actual Decommissioning Expenditures $3,232,856
Remaining Forecast $2,387,408
Current Decommissioning Estimate $5,620,264
Decommissioning Costs Collected ($5,381,547)
Estimated Under (Over) Collection $ 238,717

Collection of estimated levelized revenue requirement amounts ceased in 2020 and decommissioning
activities are nearly complete in 2023. If the Joint Application is approved, Idaho Power will record the
gain associated with the disposition of the Boardman assets under the APA in the Boardman balancing
account.

III. CONCLUSION

The levelized revenue requirement following the 2020 annual review, when full collection of
Boardman levelized revenue requirement amounts occurred, demonstrated that there was a difference
in the annual revenue requirement which, along with the sum of the associated true ups, was negative
$40,669, or a benefit to customers. Because decommissioning activities have commenced and
decommissioning expenses are being incurred, and the anticipated gain associated with the APA is yet
to be recorded, the revenue requirement true-up has remained in the balancing account. The Boardman
balancing account is also tracking variations between actual and forecasted decommissioning expenses
which will be combined with the true-up and the gain associated with the APA, to determine the final
balancing account value once complete. The Company will continue to monitor any over- or under-
collection of costs, reporting the balancing account activities to the Commission, and will adjust customer
rates in a future proceeding, if necessary, ensuring customers pay no more or no less than actual
Boardman-related costs.

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Boardman Power Plant 2022 Annual Review
Case No. IPC-E-12-09
IV. APPENDIX

Picture 1. Coal Yard Tunnel Demolition.

Pictures 2 and 3. Ash Handling System Demolition.

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Boardman Power Plant 2022 Annual Review
Case No. IPC-E-12-09

Picture 4. Power Block Dismantling.

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Boardman Power Plant 2022 Annual Review
Case No. IPC-E-12-09
Picture 5. Turbine Building Demolition.

Picture 6. Ash Dome Demolition.

BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-12-09
IDAHO POWER COMPANY
Attachment 1