20131202final_order_no_32929.pdf

Office of the Secretary
Service Date
December 2,2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR A
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY FOR THE INVESTMENT
IN SELECTIVE CATALYTIC REDUCTION
CONTROLS ON JIM BRIDGER UNITS 3
AND 4.
)) CASE NO. rPC-E-13-16
)
)) ORDER NO. 32929
)
)
On June 28,2013,Idaho Power Company filed an Application with the Commission
for a Certificate of Public Convenience and Necessity (CPCN) pursuant to ldaho Code ** 6I-
526 through 528 and 61-541. The Company seeks authorization of its investment in Selective
Catalytic Reduction (SCR) controls in Jim Bridger Units 3 and 4 and inclusion of the investment
in Idaho Power's rate base once the SCR controls are installed and operational. The Company
requests that the Commission issue an Order approving the CPCN no later than November 29,
2013.
Based upon our review of the Application, the direct and rebuttal testimony of the
parties, legal briefs, and public participation through testimony and comments, the Commission
grants in part and denies in part the Application of Idaho Power for a Certificate of Convenience
and Necessity regarding its investment in Selective Catalytic Reduction (SCR) controls in Jim
Bridger Units 3 and 4 as set out in greater detail below.
BACKGROUND
A. The Company's Application
The Company's Application states that it owns one-third of the Jim Bridger coal-fired
power plant (Jim Bridger Plant) located near Rock Springs, Wyoming. PacifiCorp owns the
remaining two-thirds and is the operator of the Jim Bridger Plant. The Application explains that
the Plant consists of four generating units and is adjacent to the co-owned Jim Bridger Coal
Company Mine, that supplies approximately six million tons per year of sub-bituminous coal to
the Plant. Application at 2. Idaho Power further states that the Plant currently employs
approximately 350 personnel.
Idaho Power maintains that the Jim Bridger Plant is the "workhorse" of Idaho
Power's thermal fleet. Id. at 3. The Application states that, after adjustment for scheduled
ORDER NO. 32929
maintenance periods and estimated forced outages, the annual energy generating capability of
Idaho Power's share of the Jim Bridger Plant is approximately 625 average megawatts. The
Company fuither asserts that this Plant has the lowest dispatch cost and the lowest installed cost
of nameplate capacity to operate of any other project in Idaho Power's thermal generation fleet.
Idaho Power stresses that the Jim Bridger Plant not only provides highly valuable capacity
during periods of peak demand, but also low-cost and dispatchable baseload energy. Id.
Idaho Power's Application requests that the Commission issue a CPCN authorizing
the Company to invest in and construct SCR systems and associated ancillary equipment for Jim
Bridger Units 3 and 4 (the Project). The Application explains that each SCR system would be
comprised of two separate universal reactors, with multiple catalyst levels; inlet and outlet
ductwork; a shared ammonia reagent system; an economizer upgrade; structural reinforcement of
the boiler and flue gas path ductwork and equipment; and extension of the existing Plant
distributed control system. 1d The Application states that an induced draft fan upgrade and an
associated auxiliary power system variable frequency drive insertion are required on Unit 4 only.
According to the Company, these emission control investments in SCR systems and associated
ancillary equipment will result in the reduction of nitrogen oxide emissions in compliance with
existing state and proposed federal emission requirements. Id.
Idaho Power explains that the BART Appeal Settlement Agreement with the State of
Wyoming and the Wyoming Regional Haze State Implementation Plan (SIP) require the
installation of SCR on Unit 3 by the end of 2015 and on Unit 4 by the end of 2016. On May 23,
2013, the United States Environmental Protection Agency (EPA) recommended approval of the
Wyoming Regional Haze SIP for installation of SCR on Units 3 and 4 in 2015 and 2016,
respectively. The Application states that the EPA has indicated it will sign a notice of final
rulemaking on November 21,2013, making the emission reduction requirements on Units 3 and
4 federally enforceable.l Consequently, if the environmental upgrades are not installed within
the time frame given by the State of Wyoming or the EPA, Idaho Power maintains that it would
be forced to stop generating from these units. Id. at4.
I At hearing, Idaho Power updated the Commission that the EPA has requested a delay regarding the issuance of its
notice of final rulemaking. A notice now may be issued as late as January 2014. It is the Company's position that
EPA delay should not impact a decision by this Commission regarding the Bridger upgrades because Idaho Power is
still bound by the compliance dates per its settlement agreement with the State of Wyoming.
ORDER NO. 32929
Idaho Power prepared the Coal Unit Environmental Investment Analysis to determine
the economic viability of installing the Jim Bridger Plant SCRs. The Coal Study analyzed the
SCR investment at Jim Bridger Units 3 and 4 as part of a larger analysis conducted for all four
units at the Plant and the two units at the North Valmy plant. The Coal Study supports
upgrading Units 3 and 4 with emissions control equipment to allow ongoing coal-fueled energy
production as the least-cost, least risk outcome for customers. Id. at 5.
The Application identifies the total cost of the project (before allowance for funds
used during construction - AFUDC) as $353,843,886. Idaho Power's one-third share is
$117,947,962 (557,649,1 l3 investment in Unit 3 and $60,298,849 investment in Unit 4 - before
AFUDC). The Company's commitment estimate2 for its portion of the project is $129,837,393 -
which includes $11,889,431 in AFUDC. Based on a high-level jurisdictional revenue
requirement analysis and tdaho Power's current jurisdictional allocation between Idaho and
Oregon, Idaho Power estimates that ldaho's addition to production plant would be approximately
$60.2 million for investments at Unit 3 and approximately $64 million for investments at Unit 4.
Id. at 8. The Application states that, at the Company's currently authorized rate of return, the
additional annual revenue requirement for SCR investments in Units 3 and 4 would be
approximately $9.1 million and $9.7 million, respectively. Id.
Pursuant to ldaho Code $ 6l-54I,Idaho Power requests that the Commission provide
authorization and a binding commitment to provide rate base treatment for the Company's
capital investment in SCRs at Jim Bridger's Units 3 and 4 in the amount of $129,837,393.
B. The Parties
In its Notice of Application dated July 19, 2013, the Commission established a
deadline for intervention. The Commission subsequently granted intervention to three parties.
The parties in this case and their respective representatives are listed below:
Idaho Power Company:
Commission Staff:
Idaho Conservation League:
Lisa Nordstrom
Jennifer M. Reinhardt-Tessmer
Kristine A. Sasser
Deputy Attorney General
Benjamin J. Otto
2 The Application states that the Company's commitment estimate is a good faith estimate of Idaho Power's total
capital cost, including AFUDC, and additional costs the Company anticipates it will incur but cannot quanti$ with
precision at this time. Application at 7.
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Industrial Customers of Idaho Power:Peter J. Richardson
Gregory M. Adams
Richardson Adams PLLC
Dean J. Miller
McDevitt & Miller LLP
Snake River Alliance:
C. Course of Proceedings
In its Notice of Application, the Commission directed Staff to convene an informal
prehearing conference after the deadline for intervention had passed. The Idaho Conservation
League (ICL), Industrial Customers of Idaho Power (ICIP, Industrial Customers) and Snake
River Alliance (SRA, Alliance) petitioned for, and were granted, intervention. Order No. 32859,
A Notice of Parties was issued on August 6,2013. The parties proposed, and the Commission
adopted, a procedural schedule for processing this case. Order Nos. 32884 and32912.
Direct testimony was filed by Staff, ICL, ICIP and SRA on October 11,2013. Idaho
Power filed rebuttal testimony on October 29, 2013. A technical hearing was conducted on
November 7 , 2013 , and legal briefs were submitted by the parties on November I 5, 2013 . ICL's
witness was unable to attend the technical hearing. Consequently, the testimony of Ms.
Courtney White was entered into the record as a public comment. Tr. at 357. A public hearing
was held on November 25,2013. Twenty-six people testified before the Commission.
THE HEARINGS
A, Technical Hearing
All parties entered appearances at the technical hearing held on November 7,2013.
Idaho Power, Commission Staff, ICIP and SRA presented witnesses for testimony and cross-
examination.
1. Commission Staff. Staffs analysis of the Company's Application focused on
whether Idaho Power's decision to invest in emission controls is necessary and whether the
project is the least cost and least risk for customers into the future when compared to other
alternatives. Tr. at 291. Staff also considered whether and to what extent the Company's
investments should be pre-approved for binding ratemaking treatment pursuant to ldaho Code $
6t-54t.
ORDER NO. 32929
Staff explained that the Wyoming Department of Environmental Quality, in
compliance with Clean Air Act Regional Haze rules, requires that Idaho Power either install
selective catalytic reduction (SCR) emission controls by December 2015 on Jim Bridger Unit 3
and December 2016 for Unit 4 to limit nitrogen oxide (NOX) emissions or discontinue operation
of the units. Staff stated that
The Company relies on 174 MW and 177 MW of net dependable baseload
capacity from Units 3 and 4, respectively. This represents approximately l0%
of Idaho Power's total system generation capacity and approximately 19% of
the Company's baseload capacity. The Company would need to maintain at
least an equivalent amount of baseload capacity to continue to reliably and
economically meet customer's [sic] electricity needs. Therefore, permanently
halting operation of Bridger Units 3 and 4 without replacing its generation
capacity is not an option.
Tr. at293. Consequently, Staff maintained that alternative resources were only feasible if the
resources were dispatchable and reliable year round. The cost of alternative considerations also
needed to o'reasonably compete with an SCR equipped Bridger unit" in order to minimize the
rate impact on Idaho Power's customers. Tr. at 297. Alternatives also needed to be compliant
with environmental regulations and constructed/operational by the time the Bridger units would
need to cease operation.
Ultimately, Staff determined that, even with the possibility of additional costs to
comply with potential future environmental regulations, Idaho Power's decision to upgrade
Bridger Units 3 and 4 was the least cost, least risk alternative. Staff recommended, however, that
the Commission limit the pre-approval permitted under ldaho Code $ 6l-541to those costs that
are already known and measureable. Staff further recommended that pre-approval be granted on
a cost category basis - as opposed to pre-approval on a total project basis. Staff explained that
"excluding uncertain amounts [of project costs] incents the Company to continue to find cost-
effective ways of implementing a project once it is underway." Tr. at 308. Staff asserted that
this approach would "assure costs are reasonably incurred in all cost item categories throughout
project development." Id. Based on its analysis, Staff recommended that the Commission pre-
approve $81,378,000.
2. ICIP. ICIP did not advocate for a denial of Idaho Power's proposed upgrades to
Bridger Units 3 and 4. ICIP's testimony focused on the prudency of granting binding ratemaking
treatment pursuant to ldaho Code $ 6l-541. The Industrial Customers maintain thato'a review of
ORDER NO. 32929
part of the investment in this docket and part of the investment at a later unspecified time is
simply not prudent." Tr. at 344. ICIP further stated that no compelling reason exists for the
Commission to pre-approve Idaho Power's investments in Bridger.
ICIP asserted that binding ratemaking treatment "is not only bad public policy but is
based on questionable legal foundations." ICIP Legal Brief at 2. The Industrial Customers are
concerned that if Idaho Power's coal plants become obsolete prior to the expected useful life of
the Company's investment, ratepayers will be left paying the costs of a plant that is no longer
providing energy. ICIP argued that pre-approval of costs inappropriately shifts the risk of Idaho
Power's investment from its shareholders to its ratepayers. ICIP contended that a traditional
Certificate of Public Convenience and Necessity (CPCN) granted pursuant to ldaho Code $ 6l-
526 "provides the Company with more than adequate assurance of recovery while still affording
a modicum of protection to the ratepayers in the form of a prudence review when the plant enters
service to the public." Id. at 4.
ICIP testified that, although Idaho Power's coal studies indicate that SCR upgrades
are the Company's lowest cost option, scenarios exist that could make the upgrades uneconomic.
Tr. at 348. Consequently, ICIP argued that it would be "good regulatory policy" to evaluate the
level of Idaho Power's expenditures in the Bridger Units 3 and 4 upgrades at the time that
Company asks for the costs to be included in customers rates. Alternatively, ICIP argues that, if
the Commission decides to pre-approve Idaho Power's investment, the Company only be
permitted to earn a fraction of its overall rate of return because of the diminished risk regarding
the investment. Tr. at 350.
3. SRA. SRA recommended that the Commission not only deny binding ratemaking
treatment, but also deny Idaho Power's request for a CPCN under ldaho Code $ 6l-526. The
Alliance questioned the "environmental and economic sustainability" of coal and testified that it
is not in the best interest of ratepayers to invest in coal-fired generation "in light of the current
uncertain regulatory climate. . . ." Tr. at 86.
Given the magnitude of the investments sought by Idaho Power here, there is
a risk that approval of these investments will place utility customers on an
irreversible course toward future investments of unknown size, as Idaho
Power clearly intends to extend the life of these coal plants as long as
possible.
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Tr. at 88. SRA further maintained that Idaho Power did not adequately consider alternatives
such as energy efficiency and renewable energy resources.
SRA argued that ldaho Code $ 6l-541is intended to reduce a utility's financial risk
in major investments - not insulate utilities from regulatory or political risk. SRA asserted that
the legislative history associated with the enactment of Section 6I-541 "makes it clear that the
central purpose of the act was to facilitate financing of major transmission or generation
projects" at times when financial markets are risk averse. SRA Brief at 4. The Alliance stated
that binding ratemaking treatment is not required for Idaho Power to obtain financing for its
proposed Bridger upgrades. SRA Brief at 2. SRA noted that Idaho Power admiued that
favorable financing terms were not the primary reason for the Company to seek pre-approval -
"the current social and regulatory risk associated with coal-fired investments is." Tr. at 242.
Because financing is not an issue, the Alliance maintains that it would be inappropriate for the
Commission to "irrevocably and prematurely shift these regulatory risks away from the utility
and onto ratepayers." SRA Brief at 6. Furthernore, SRA argued that Idaho Power has not met
the burden required by statute to obtain binding ratemaking treatment.
4. Idaho Power's Rebuttal. On rebuttal, the Company took exception to StafPs
recommendation that only known and measurable costs be pre-approved. Idaho Power stated
that "[w]hile the cost magnitude of necessary expense categories that are yet to be incurred may
not be easily quantifiable, uncertainty does not negate the necessity of those items as part of the
installation cost of the SCRs." Tr. at 233-234. Idaho Power suggested that, for categories where
expenses were reasonably certain but not definitively quantifiable, it would be reasonable for the
Commission to pre-approve 50% of the estimated costs. The Company noted that this was the
method recommended by Staff and adopted by the Commission for the Langley Gulch CPCN.
Id. at234.
Idaho Power also disputed ICIP's assertion that the circumstances of this case did not
present a compelling basis for pre-approved ratemaking treatment. Id. at237.
This CPCN filing allows interested parties to fully vet the controversial issues
prior to the Commission making a decision. It is important to the Company
that customers and stakeholders have an opportunity to participate in the
public process before the Company undertakes a significant investment like
that required for these SCRs. It is also important for the Company to receive
assurance from the Commission that its continued investment in coal-fired
generation will obtain rate base treatment prior to proceeding with such large
ORDERNO. 32929
expenditures. By filing its Application, the Company intended to provide the
Commission with the ability to evaluate whether this investment is
economically, socially, and politically prudent, and in the best interest of the
Company and its customers, before the investment is made.
Id. at 238. Idaho Power further argued that regulatory pre-approval does not make the
investment less risky for the utility such that the Company's return on equity should be reduced.
Id. at 240. The Company maintained that its actual expenditures would still be subject to
thorough review and audit when Idaho Power asked that the amounts be included in customers
rates.
Idaho Power emphasized that Commission authorization for binding ratemaking
treatment "demonstrates ongoing regulatory support to the rating agencies and to the external
financial community, thereby reducing the risk of unfavorable financing costs not only for the
SCR controls, but also for Idaho Power's total construction progrart." Id. at241. Finally, Idaho
Power agreed the future of coal regulation is uncertain, but "[w]aiting for perfect knowledge
before taking action is not an option that will ensure reliable service to customers." Id. at 148.
B. Comments and Public Testimony
More than 200 public comments were received by the Commission. Many comments
were filed by customers of other electric utilities who are concerned Idaho citizens. Comments
were received from citizens as far east as Ithaca, New York and as far west as Los Angeles,
Califomia. Many public comments supported Idaho Power's Application as the least cost and
most reliable alternative. The overwhelming majority of commenters opposed any investment in
coal. Almost half of the total public comments received support the development of renewable
technologies in lieu of upgrading an aging coal plant. Several comments suggested that the State
should consider nuclear power.
Organizations such as the Idaho Association of Commerce and Industry, Magic
Valley Builders Association, Boise Metro Chamber of Commerce, Lemhi County Economic
Development Association, Twin Falls County Board of Commissioners and the Greater Pocatello
Chamber of Commerce filed comments in support of Idaho Power's Application. These
organizations, and several private citizens, support investment in upgrades that will bring Bridger
Units 3 and 4 into compliance with new emissions standards and still allow the Company to
provide low cost, reliable electric service.
ORDER NO. 32929
Of those opposing Idaho Power's Application, many declared that a decision in the
Company's favor would result in a benefit to the Company's shareholders and a detriment to the
Company's ratepayers. Commenters claimed that investment in upgrades at Bridger was just
"the tip of the iceberg" and that future investment to meet anticipated environmental and
regulatory regulations was sure to follow. Commenters urged the Commission to consider new
technologies and renewable resources as replacements for an old coal plant that is bad for the
environment and harmful to future generations. One heartfelt comment was submitted by an l1-
year-old who is not only worried about the effects coal generation has on the environment but
also the physical health of those working in the coal mines. She maintained that coal is "an
outdated and unreliable source of energy."
A public hearing was held onNovember25,2013. More than 110 people were in
attendance. Orgarrizations such as the Sierra Club and League of Women Voters had
representatives in attendance to present testimony. A total of twenty-six people testified as to
whether the Commission should grant Idaho Power's request for a CPCN and request for binding
ratemaking treatment. Many of those who testified also submitted comments online. All of
those who testified opposed binding ratemaking treatment for Idaho Power's investment in
Bridger Units 3 and 4. One individual testified that, although the facts may presently support the
issuance of a CPCN, pre-approval of the Company's investment would not be prudent.
Idaho Power customers classified the proposed upgrades as "bad business" and
contrary to the State's energy policy. Many of those who testified asserted that they would be
willing to pay higher energy costs in exchange for cleaner energy. Several people questioned
whether coal is indeed a oolow cost fuel" after all of the upgrades, mandates, regulations and
"hidden costs" are met. Public testifiers declared this proceeding as a "monumental time" and
"opportune moment" for the Commission to direct Idaho Power away from coal-fired generation.
Several people who testified were both ratepayers and shareholders of Idaho Power. They
claimed to be "deeply disturbed" by decisions being made by the Company's upper-management
and encouraged the Commission to make shareholders responsible for the risk of the Bridger
upgrades.
FINDINGS AND CONCLUSIONS
Idaho Power is an electric corporation and public utility pursuant to ldaho Code $$
61-1 19 and 6l-129. The Commission has jurisdiction over this matter pursuant to Title 61 of the
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Idaho Code and the Commission's Rules of Procedure. IDAPA 31.01.01.000 et seq. The
Commission has jurisdiction over the specific issues presented in Case No. IPC-E-13-16
pursuant to ldaho Code $$ 6l-526 (Certificate of Convenience and Necessity) and 61-541
(Binding Ratemaking Treatment).
We find the future public convenience and necessity requires the proposed upgrades
to Idaho Power's Bridger Units 3 and 4. Idaho Power describes the Bridger plant as "the
workhorse of ldaho Power's thermal fleet.o' Application at 3. Commission Staff confirmed that
Bridger Units 3 and 4 provide approximately l0% of Idaho Power's total system generation
capacity and approximately 19% of the Company's baseload capacity. Tr. at 293. T\e Bridger
Plant is a source of low-cost and dispatchable baseload energy that provides reliable capacity
during peak customer demand. The suggestion by intervenors that renewable resources and
energy efficiency could somehow replace Bridger's ability to reliably provide energy and
capacity is simply not realistic in the near term. Generation facilities such as Bridger and
Langley Gulch are the plants that help Idaho Power to balance the intermittent generation
provided by renewable resources such as wind and solar. These plants are also critical to the
reliable operation of the high voltage transmission system in that they provide voltage and
frequency support.
In considering an application for a Certificate of Convenience and Necessity, "[t]he
public interest is the paramount consideration of the commission. . . ." Application of Kootenai
Natural Gas Co.,78 Idaho 621,627,308 P.2d 593,596 (1957). We find the services and
operations resulting from the proposed upgrades to Bridger Units 3 and 4 are necessary for the
continued provision of adequate and reliable electric service in the near term. Without upgrades
to meet the Clear Air Act's Regional Haze rules, Units 3 and 4 would be forced to cease
operation by December 2015 and December 2016, respectively. Cost-effective replacement
resoruces that are dispatchable and reliable year-round do not presently exist nor could they be
brought on line before the required dates. We find, therefore, that the upgrades are in the public
interest.
We acknowledge the public's concerns about unnecessarily extending the life of the
Bridger coal plant. The detrimental effects of long-term coal use on human health, the climate,
wildlife, land, and water are well-documented. However, Idaho Power's analysis presented, and
StafPs investigation confirmed, that an investment in selective catalytic reduction controls is
l0oRDER NO. 32929
presently the least-cost, least-risk alternative to both reduce environmental effects and allow
reliable electric service to continue. ICL and SRA argued about the risk of future environmental
regulations, but neither organization outlined a viable alternative that could reasonably and
timely replace the value of energy and capacity that Bridger provides. "The commission cannot
speculate . . . upon the future availability of [a resource], but must confine its determinations to
facts susceptible of demonstration within reasonable limits." Applications of Intermountain Gas
Co.,77 Idaho 188, 199 289 P.zd 933, 940 (1955). Short-term reliability concerns make the
issuance of a CPCN the prudent decision at this point in time.
While we find that present circumstances require the proposed upgrades to allow
Bridger Units 3 and 4 to continue providing reliable energy to Idaho Power's customers, we
recognize that the future of coal-fired generation in the United States is uncertain at best. We
admonish the Company to stay abreast of potential future environmental regulations that could
negatively impact its investment in the Bridger upgrade. To that end, we direct the Company, as
a condition of its CPCN (Idaho Code $ 6I-528), to submit quarterly reports updating the
Commission on any changes to environmental policy or regulations as the Bridger upgrades are
installed and placed in service.
By approving the issuance of a CPCN pursuant to ldaho Code $ 61-526, this
Commission indicates its acceptance of Idaho Power's proposal to upgrade Bridger Units 3 and
4. [n determining whether the public convenience and necessity requires the upgrade, we have
considered the facts as they exist today. As we have already stated, upgrades to Bridger Units 3
and 4 are necessary in order for Idaho Power to continue providing reliable power to its
customers. However, all parties, including Idaho Power, acknowledge that the future of coal is
uncertain. Additional future environmental regulations are likely. It is not inconceivable that,
during the installation of the SCRs, a tipping point could be reached making them uneconomic.
It is in the best interest of the customers, the Company, and the Company's shareholders for
Idaho Power to be continuously analyzing the impact of changing environmental regulations on
its upgrade project. As the project moves toward completion over the next several years, we
direct Idaho Power to return to the Commission if viable alternatives to the Bridger Units 3 and 4
upgrades become available.
We find that the Company has not established a compelling case for binding
ratemaking treatment pursuant to ldaho Code * 6L-541. The statute provides that "[t]he
oRDER NO. 32929 11
commission may accept, deny or modify a proposed ratemaking treatment requested by the
utility. In determining the proposed ratemaking treatments, the commission shall maintain a fair,
just and reasonable balance of interests between the requesting utility and the utility's
ratepayers." Idaho Code $ 6l-54I(4). Because of the uncertain future of coal-fired generation,
we find it unreasonable to prematurely commit ratepayer dollars to support Idaho Power's
investment.
As noted by several parties, Idaho Power's investment in its Langley Gulch plant is
the only other circumstance where pre-approval of a utility's investment pursuant to Idaho Code
$ 61-541 has been considered. The issuance of a CPCN and grant of binding ratemaking
treatment for Idaho Power's investment in Langley Gulch is entirely distinguishable from the
present case. First, the economy and financial markets were risk averse to large investments
when Idaho Power was attempting to raise capital to build Langley Gulch. Second, the
investment required for Langley Gulch was exponentially larger than what is required for the
Bridger upgrades. Finally, the balance of interests weighed in favor of partial pre-approval
because, in addition to the assurances that pre-approval provided for the Company, favorable
financing terms ultimately inured to the benefit of the ratepayers. In the present case, the
Company was vague about how much outside financing would be utilized for this project.
Moreover, Idaho Power has already entered into construction contracts without a decision about
its request for binding ratemaking treatment. We are not persuaded that the Company's ability to
finance the Bridger upgrades is at risk if binding ratemaking treatment is not approved.
Approval of binding ratemaking treatment for the upgrades to Bridger Units 3 and 4
would provide the Company with the economic, social and political assurance that it seeks while
the ratepayers bear the risk of the environmental uncertainties. Consequently, we decline to pre-
approve any portion of Idaho Power's investment in the proposed Bridger upgrades. We find
that granting a CPCN pursuant to ldaho Code $ 6l-526 and denying binding ratemaking
treatment pursuant to ldaho Code 5 6I-541 maintains a fair, just and reasonable balance of
interests between the Company and the Company's ratepayers.
ORDER
IT IS HEREBY ORDERED that Idaho Power's request for a Certificate of Public
Convenience and Necessity pursuant to ldaho Code * 6L-526 for SCR upgrades to Bridger Units
3 and 4 is granted. A Certificate shall be issued as a separate document.
oRDER NO. 32929 T2
IT IS FURTHER ORDERED that the Company submit quarterly reports updating the
Commission on any changes to environmental policy or regulations until such time as the
Bridger upgrades are installed and placed in service.
ru IS FURTHER ORDERED that the Company return to the Commission if viable
alternatives to the Bridger Units 3 and 4 upgrades become available.
IT IS FURTHER ORDERED that the Company's request for binding ratemaking
treatment pursuant to ldaho Code $ 6l-541is denied.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. Idaho Code $ 6l-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this A^l
day of December 2OI3.Grru
PAUL KJELLANDER, PRESIDENT
W
MACK A. REDFORD, COMMISSIONER
ATTEST:
O:IPC-E-13-16_ks4
MARSHA H. SMTTH, COMMISSIONER
oRDER NO. 32929 13