20140328Comments.pdf

7!lmlo
NPO1TER=
LISA D. NORDSTROM
Lead Gounsel
[e-mail]
March 28,2014
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-13-23
Approval of Special Contract with J. R. Simplot Company - ldaho Power
Company's Comments
Dear Ms. Jewell:
Enclosed forfiling in the above matterare an originaland seven (7) copies of ldaho
Power Company's Comments.
Sincerely,
fir:*Jllw
Lisa D. Nordstromv
LDN:csb
Enclosures
1221 w. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I no rd strom@ida hopower. co m
Attorney for ldaho Power Company
!N THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A SPECIAL CONTRACT
WITH J.R. SIMPLOT COMPANY.
;n' I -t
CASE NO. IPC-E-13-23
IDAHO POWER COMPANY'S
COMMENTS
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
COMES NOW, ldaho Power Company ("ldaho Powed' or "Comp?ry"), and in
accordance with ldaho Public Utilities Commission ("Commission") Order No. 32984,
hereby submits its Comments regarding the above matter.
Following considerable negotiation, J. R. Simplot Company ("Simplot") advised
ldaho Power on November 27, 2013, that it would sign the Electric Service Agreement
(also referred to herein as a "special contract") for Simplot's Caldwell facility but only if
Sections 11.2-11.4 regarding Iimitations on liability were substantially revised. ldaho
Power believed (and still believes) that Sections 11.2-11.4 were (and are) drafted
appropriately. Having reached an impasse, on December 4,2013, ldaho Power filed an
Application for Approval of Special Contract Terms between ldaho Power and Simplot
IDAHO POWER COMPANY'S COMMENTS - 1
containing the liability limitation provisions at issue. Simplot responded with an Answer
to ldaho Powe/s Application on February 5, 2014, in which it opposed the Company's
proposed limitations on liability and urged the Commission to adopt a substitute method
for calculating Simplot's Caldwell special contract rate. On February 25, 2014, the
Commission issued its Notice of Application and Modified Procedure in Order No.
32984. For the reasons set forth below, ldaho Power urges the Commission to approve
the terms of the special contract with the limitation of liability provisions and rate as
proposed by ldaho Power in its Application.
I. LIMITATION OF LIABILITY
A. ldaho Power's Proposed Limitations Are Narrowlv Tailored to Protect
Customers.
Electric service is inherently subject to occasiona! interruption and fluctuation,
often due to forces beyond the utility's control. Prolonged outages have the potential to
cause damages in the billions of dollars. For example, the August 14, 2OO3, blackout
that occurred throughout the Midwestern and the Northeastern United States caused an
estimated $5 billion in damage.l Power outages and disturbances across the country
have been estimated to cause $119 billion to $188 billion in damages per year.z ldaho
Power is not immune to such outages-a short circuit on a Wyoming transmission line
serving the Jim Bridger power plant in 1996 resulted in a power failure affecting eight
western states.
'Thomas Eisenmann & R. MatthewWillis, Blackout: August 14,2003 (Harvard Bus. Sch. June
28,2004\.
2 Primen, Ihe Cosf of Power Disturbances to tndustriat and Digital Economy Companrbs (June
29,2001).
IDAHO POWER COMPANY'S COMMENTS - 2
Today, the electric grid faces a variety of challenges to maintaining its reliability,
from integrating increasing amounts of intermittent generation to acts of sabotage. The
grid's technological complexity results in potential service failures unrelated to human
error.3 ln light of this complexity, it is very difficult for a jury to distinguish between
human error, negligence, and failures of technology beyond ldaho Power's control.
Limitations on liability protect utilities and customers from "liability for catastrophic loss
and potential financial distress."4 The proposed special contract between ldaho Power
and Simplot includes three "limitations of liability" provisions, which are also known as
exculpatory clauses.
The provisions generally protect ldaho Power and its customers in two ways.
First, Section 11.2 limits the types of damages for which ldaho Power may be liable.
Specifically, ldaho Power would be protected from liability for "consequential" or
"special" damages, which do not flow directly and immediately from the action but
instead from some of the consequences or results of the action.s Consequential
damages arising from the intervention of specia! circumstances are not ordinarily
predictable and would not necessarily be incurred by every injured party.
3 lransmissrbn Access Policy Study Group v. F.E.R.C.,225F.3d 667, at 727 (D.C. Cir.2000)(". . technological complexity of modern utility systems and resulting potential for service failures
unrelated to human errors justified liability limitations.").
a Houston'Lighting & Power Co v. Auchan, 995 S.W.2d 668, 673 (Tex. 1999)(hereinafter "HL &
P'); ld. at 675 ("The public interest in protecting the financial integrity of public utilities is another basis for
concluding that tariff provisions such as the one at issue in this case are not unreasonable when applied
to claims for ordinary negligence."); see a/so Prosser & Keeton, The Law of Torts 663 (5'" Ed. 1984) ("The
consequential damages from a blackout . . . can be enormous and most regulatory agencies take this into
account when establishing limitation on liability.").
5 Section 11.2 ("Each party expressly agrees that neither party nor its affiliates will under any
circumstances be liable under any theory of recovery, whether based in contract, in tort (including
negligence and strict liability), under warranty, or otherwise, for: any indirect, special, incidental or
consequential loss or damage or punitive damages whatsoever; loss of profits or revenue; loss of
use of material or equipment; or increased costs of capital and fuel cost; provided, however, that
nothing in this paragraph 11.2 shall be construed to limit Simplot's payment obligations to ldaho Power.").
(Emphasis added).
IDAHO POWER COMPANY'S COMMENTS - 3
Consequential damages can be substantial and can include lost profits from business
operation, lost use, lost sales contracts, and reduced value because of defective quality.
These are the types of risks known only by Simplot that ldaho Power could not
anticipate and factor into its cost-of-service calculations.
Second, Section 11.3 limits total aggregate damages, whether direct6 or indirect,
to 150 percent of the total charges paid by Simplot in a calendar year.' lmportantly,
both these protections are entirely reciprocal and provide the same protections for
Simplot. These provisions are narrowly focused and, contrary to Simplot's
characterizations, do not shield ldaho Power from "virtuatly a!! liability."s These types of
damages are covered by the Company's liability insurance and self-insured retention
and are factored into the cost-of-service calculation for all customers.
Finally, Section 11.4 disclaims any expressed or implied warranties, including
those of merchantability and fitness for a particular purpose, with respect to the services
provided in the special contract.e lf electricity is found to be a "good"1o rather than a
6 "Direct damages" arise naturally or ordinarily from a breach of contract; they are damages
which, in the ordinary course of human experience, can be expected to result from breach.
7 Section 11.3 ("Each party agrees under no circumstances shall the total aggregate claims
against and liability of the other party for direct damages, under any theory of recovery, whether based in
contract, in tort (including negligence and strict liability), or otherwise, exceed one hundred fifty percent
(150%) of the total charges paid by Simplot to ldaho Power under this contract under any given calendar
year; provided, however, that this limitation of liability shall not limit Simplot's payment obligations to
ldaho Power under this agreement.").
t J. R. Simplot Company Answer to ldaho Power's Application at 4 ("Simplot Answer"). See
contra,ln the Matter of Advice Letter No. 89-05 of Contel of the West, lnc., Case No. CON-T-89-2, Order
No. 22812 (Oct. 30, 1989) (rejecting request for full tort immunity).
e Section 11.4 ("Except as provided in this agreement, ldaho Power makes no warranties,
expressed or implied, including without limitation, those of merchantability and fitness for a particular
purpose, with respect to the work and services provided hereunder.").
10 ldaho Code $ 28-2-105 defines "goods" as "all things . . . which are movable at the time of
identification to the contract for sale . . . ."
IDAHO POWER COMPANY'S COMMENTS - 4
service, and thus fa!!s underthe Uniform Commercia! Code, tdaho Code S 28-2-31611
allows contracting parties to disclaim or limit warranties in writing.
B. The Commission Should Revise lts Policv and Allow Limitations on
Liabilitv for Special Contracts.
The Commission issued its last "official policy statement"l2 on the issue of tort
immunity limitations in its 1989 Confel3 Order. ln that case, the Commission concluded
that tariff provisions limiting a utility's liability in the provision of service are "seldom just
and reasonable." lmportantly, the Commission did not conclude that it was legally
prohibited from approving limitations of liability. On the contrary, the Commission
specifically found that it was legally authorized to allow utilities to limit their liability.
However, based on regulatory policy, the Commission concluded such provisions
should be approved only where the record established that "(1) it is in the public interest
to provide the particular utility service and to encourage the provision of the service, and
(2) there is a substantia! likelihood that the service would not be provided in the
absence of limitations of liability."la ln Contel, the Commission found that the utility had
failed to make this showing and so rejected the tariff language limiting the utility's
liability.
11 ldaho Code $ 28-2-316 states, ". . . to exclude or modify the implied warranty of merchantability
or any part of it the language must mention merchantiability and in case of a writing must be conspicuous,
and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and
conspicuous." Moreover, "unless the circumstances indicate othenivise, all implied warranties are
excluded by . . . language which in common understanding calls the buyer's attention to the exclusion of
warranties and makes plain that there is no implied warranty."
t' Carson Bradley v. Utah Power and Light Company, Case No. UPL-E-89-9, Order No.23287
(sept. 10, 1990). 116 P.U.R.4tn 133, 136.
tt ln the Matter of Advice Letter No. 89-05 of Contel of the West, lnc., Case No. CON-T-89-2.
'o Case No. CON-T-89-2, Order No.22812 at 1 (Oct 30, 1989).
IDAHO POWER COMPANY'S COMMENTS - 5
The Commission should narrowly revisit liability limitations specific to special
contract customers and approve ldaho Power's proposed liability limits in this case.
Public policy supports the Company's proposed liability limitations as necessary
measures to protect customers, maintain just and reasonable rates, and allocate a
portion of the risk to the special contract customer who is best able to assess and
mitigate it.
1. Liabilitv Limitations Protect Residential Customers.
Limitations of liability allow for fair and reasonable treatment of all customers
because small customers are not required to potentially subsidize disproportionately
large damage awards to large commercial and industrial customers. Large, special
contract customers are by definition "special"-uniquely situated industrial operations
that are Iarge enough to justify being considered a cost-of-service class of one. lf these
large customers fail to take steps to protect themselves from a potential outage, they
would be exposed to potential losses disproportionate to the potential losses suffered by
residential customers.ls Resulting losses would vary greatly depending upon factors
like the customer's use of electricity, the activities each was engaged in at the time of
the outage, the ability to defer these activities, the cost of such deferral, and the nature
and efficacy of the self-protection measures taken by each customer. While the cost of
providing service without liability limitation provisions would vary greatly both among
and within customer classes, it would be extremely difficult to establish a rate structure
that reflected accurately (or even approximately) the resulting wide variation in cost-of-
service. Many small customers would be required to pay rates significantly higher than
'5 HL & P, 995 S.W.2d at 673 (liability limitations resulted in lower utility rates by protecting the
majority of customers from substantial losses incurred by limited commercial and industrial customers).
IDAHO POWER COMPANY'S COMMENTS - 6
their cost-of-service in order to provide revenues sufficient to recover the
disproportionately high liability component of the cost-of-service for relatively few large
customers.
In 1999, the Texas Supreme Court upheld a limitation of liability provision similar
to the one at issue here.16 The Court found that limitations of liability resulted in lower
rates for customers because the only customers "who would suffer substantial
economic damages would be commercial or industrial users [and] fl]osses paid to those
commercial or industrial customers could be passed on to smaller customers, including
residential users, in the form of higher rates."17 Thus, the Court reasoned that "tariffs
that limit economic damages are not unreasonable, even when the damages suffered
are substantia!."18 Here, in an effort to keep rates lower for all customer classes, the
'6 HL & P, 995 S.W.2d at 669-670 (upholding the following tariff language: "Company IHL & fl
will make reasonable provisions to supply steady and continuous electric service, but does not guarantee
the electric service against fluctuations or interruptions. Company will not be liable for any damages,
whether direct or consequential, including, without limitation, loss of profits, loss of revenue, or loss of
production capacity, occasioned by fluctuations or interruptions unless it be shown that Company has not
made reasonable provisions to supply steady and continuous electric service, consistent with the
Customer's class of service, and in the event of a failure to make such reasonable provisions (whether as
a result of negligence or otherwise), Company's liability shall be limited to the cost of necessary repairs of
physical damage proximately caused by the service failure to those electrical facilities of Customer which
were then equipped with the protective safeguards recommended or required by the then current edition
of the National Electrical Code.").
" td. at6l3.
tu ld. at 673. The Texas court also observed that many other state courts concluded that absent
liability limitations a utility would be forced to raise rates. See Cole v. Pacific Tel. & Tel. Co., 112
Cal.App.2d 416,246 P.2d 686,688 (1952); Landrum v. Florida Power & Light Co., 505 So.2d 552, 554
(Fla.Dist.Ct.App.1987); Southern Bell Tel. & Tel. Co. v. lnvenchek, lnc., 13O Ga.App. 798, 204 S.E.2d
457, 460 (1974; ln re lllinois Bell Switching Station Litig., 161 lll.2d 233,204 lll.Dec. 216, 641 N.E.2d
440,446 (199a); Singer Co. v. Baltimore Gas & Elec. Co.,79 Md.App. 461, 558 A.zd 419,427 (1989);
Wilkinson v. New England Tel. & Tel. Co., 327 Mass. 132, 97 N.E.2d 413, 416 (1951); Computer Tool &
Eng'1, lnc. v. Northern Stafes Power Co., 453 N.W.2d 569, 573 (Minn.Ct.App.1990); Montana ex rel.
Mountain Sfafes Tel. & Tel. Co. v. District Court,160 Mont. 443, 503 P.2d 526,528-29 (1972); Bulbman,
lnc. v. Nevada Bell,108 Nev. 105, 825 P.2d 588, 590-91 (1992); Coachlight Las Cruces, Ltd. v. Mountain
Bell Tel. Co., 99 N.M. 796, 664 P.2d 994, 998-99 (App.1983); Lee v. Consolidated Edison Co., 98
Misc.2d 3O4, 413 N.Y.S.2d 826, 828 (1978); Behrend v. Bell Tel. Co., 242 Pa.Super. 47, 363 A.2d 1 152,
1 165 (1976) , vacated and remanded, 473 Pa. 320, 374 A.2d 536 (1977), affd on remand, 257 Pa.Super.
35, 390 A.2d 233 (1978); Allen v. General Tel. Co., 20 Wash.App. 144, 578 P.2d 1 333, 1 337 (1978).
IDAHO POWER COMPANY'S COMMENTS - 7
Commission should permit limited liability in certain categories of contract damages in
recognition of the fact that special contract customers can protect and/or insure
themselves against consequential damages without socializing those costs to other
customers.le
2. Liabilitv Limitations Properlv Allocate Risk.
Utilities are exposed to significant litigation risk associated with blackouts and are
unable to reasonably ascertain and protect themselves against that type of risk.2o lt
would be extremely difficult to make a reasonably accurate estimate of any utility's
actual level of exposure in the event of an outage in the absence of a liability Iimitation
provision. The process of making such an estimate would be complicated and would
require access to a great deal of information that is available only to the utility's
individual customers. However, it is apparent that a prolonged system-wide outage
would expose a utility to potentially catastrophic damages and would require it to
expend substantial sums on legal services even if it was successful in contesting its
liability for damages.2l
Special contract customers, on the other hand, are better positioned than a utility
or smaller customer to protect their own interests by estimating their exposure to losses
attributable to a potential power outage and protecting themselves from those potential
tt See Soufhwesfern Sugar & Molasses Co. v. River Terminals Corp., 360 U.S. 41 1, 418 (1959)
(customers better able to insure themselves against risk).
20 HL & P, 995 S.W.2d at674 ("The PUC reasoned that an electric utility is unable to anticipate
the 'nature and size of the claims that can be incurred because of service interruptions' and that it is not
feasible to require a utility 'to protect itself against these potential losses which simply cannot be
accurately ascertained. "' ).
" See Richard J. Pierce, Jr., Regional 7-ransmrssion Organizations: Federal Limitations Needed
for Tort Liability,23 Energy Law Journal 63, 68 (2002) (noting extensive litigation related to blackouts in
the Midwest in 1998, the northeast in 1999, and in California in 2000 and 2001 ).
IDAHO POWER COMPANY'S COMMENTS - 8
losses.22 Large customers have access to the data about the nature of their electric
uses and the likely consequences of outages. Based on this information, large
customers can take preventative measures, such as installing backup generating
equipment or obtaining business interruption insurance.23 lt is reasonable to expect
large customers to mitigate their risks to avoid requiring smaller customers to pay the
higher rates that would be attributable to large customers' disproportionately larger
damage awards in the event of a system outage.
Further, under the regulatory compact, ldaho Power is required to serve all
customers in its service territory and cannot choose to limit its risk exposure by refusing
service to customers with exceptional potential damages. ln the words of the
Commission, "ldaho Power has the responsibility to serve all of its customers at all
times."24 Thus, this relationship lacks proportionality-it would be unjust to hold ldaho
Power liable for potentially large unlimited direct and consequential damages when its
currently authorized rate of return on equity does not reflect the assumption of such
risks.25
" HL & e 995 S.W.2d at674 (". . . the burden of estimating potential damages and of obtaining
protection against losses caused by electrical outages should fall on the customer, not the utility.").
" See Southwestern Sugar,360 U.S. at 418.
2a Meridian Gold Company v. tdaho Power Company, Case No. IPC-E-90-14, Order No. 23657 at
3 (April 26, 1991).
'u HL & P at 674 ('An unregulated business can set its prices based on what the market will bear
and can factor in potential or actual liability. When an electric utility's rate is set by the PUC, it cannot
vary from that rate. And an electrical utility cannot pick and choose its customers on the basis of the
potential liability that would be associated with a loss of power to a particular customer's business . . . . lt
must provide service to all regardless of the potential liability that would be associated with a loss of
power to a particular customer's business.").
IDAHO POWER COMPANY'S COMMENTS - 9
3. Utilitv Tariffs Commonlv Include Liabilitv Limitations.
Many utility tariffs contain provisions addressing specific instances when a utility
cannot be held liable for negligent conduct or omission.26 State regulatory commissions
and the courts have generally upheld limitations of liability because they "balance[ ]
lower rates for all customers against the burden of limited recovery for some."27 As
summarized by the Oregon Court of Appeals, "Courts are virtually unanimous [in
holdingl that provisions limiting a public utility's liability are valid so long as they do not
purport to grant immunity or limit liability for gross negligence."28 The U.S. Supreme
Court has also upheld limitation of liability provisions when the claim for economic
damages is based on alleged negligence as opposed to damages for physical injury.2e
Based on its finding that many courts have approved liability limitations, in 1999 the
Texas Supreme Court concluded that limitations of liability are not unreasonable when
'u See e.g., Transmission Acces s Policy Study Group, 225 F.3d a1727 ("Prior to unbundling, retail
tariffs were primarily a matter for state regulation, and most states had approved tariff provisions
permitting utilities to limit their liability for service interruptions to instances of gross negligence or willful
misconduct."); see a/so Pierce, 23 Energy Law Journal, n. 12 (the following courts have approved some
form of liability limitation: Los Angeles Cellular Tel. Co. v. Superior Cf., 65 Cal. App. 4th 1013 (1998);
Woloshin v. Diamond Stafe lel. Co., 380 A.2d 982,984-85 (Del. Ch. 1977); lll. Bell Switching Station
Litig.,641 N.E.2d 440,441-45 (199a); Angelo Pavone Enters. v. South Cent. Bell Tel. Co.,459 So.2d
1223, 1226 (La. Ct. App. 1984); Wilkinson v. New England Tel. &Tel. Co.,97 N.E.2d 413,416 (Mass.
1951); Montana ex rel. Mountain Sfafes Tel. &Tel. Co. v. Dist. Cf., 503 P.2d 526,529 (Mont. 1972); Allen
v. General Tel. Co., 578 P.2d 1333, 1336-37 (Wash. Ct. App. 1978); O/son v. Mountain Sfates Tel. & Tel.
Co.,580 P.2d782,784(Ariz. Ct. App. 1978); Shoemakerv. Mountain Sfafes Tel. &Tel. Co.,559 P.2d
721,724 (Colo. Ct. App. 1976); Southern BellTel. &Tel. Co. v. lnvenchek, |nc.,204 S.E.2d 457, 460 (Ga.
Ct. App. 1974); Burdick y. Soufhwestern BellTel. Co.,675P.2d922,925 (Kan. Ct. App. 1984); Computer
Tool and Eng'q. lnc. v. Northern Stafes Power Co., 453 N.W.2d 569, 573 (Minn. Ct. App. 1990); Bulbman,
lnc. v. Nev. Bell,825 P.2d.588, 590 (Nev. 1992); Coachlight las Cruces, Ltd. v. Mountain Bell TeL Co.,
664 P.2d 994, 1000 (N.M. Ct. App. 1983); Lee v. Consolidated Edison Co., 413 N.Y.S.2d 826, 823
(1978); Garrison v. Pacific Northwest Bel/, 608 P.2d 1206, 1211 (Or. Ct. App. 1980); Behrend v. Bell Tel.
Co., 363 A.2d 1152,1166 (Pa. Super. Ct. 1976), vacated, 374 A.2d 536 (Pa. 1977), affd, 390 A.2d233
(Pa. Super. Ct. 1978).
27 Transmission Access Policy Study Group,225 F.3d a|727.
28 Garrison v. Pacific Northwest Bett,608P.2d 1206, 1211 (Or. Ct. App. 1980).
2e Southurestern Sugar,360 U.S. 411; Western lhnion Tet. Co. v. Esteve Bros. & Co., 256 U.S.
566 (1921); Hart v. Pennsylvania R.R. Co., 112 U.S. 331 (1884).
IDAHO POWER COMPANY'S COMMENTS - 1O
they limit economic damages resulting from the utility's negligence.30 Here, the
Commission should likewise conclude that the limitation on liability at issue here is
reasonable and should be approved.
C. Limitation of Liabilitv ls Lesallv Enforceable.
The ldaho Legislature has granted the Commission authority to balance the
needs of the public versus the needs of the individual in connection with the provision of
public utility service.3l The Commission has previously construed the tdaho Code's
explicit grants of statutory authority together with ldaho Code S 61-501's grant "to do all
things necessary to carry out the spirit and intent of the provisions of this act" to give it
the authority, in proper circumstances, to limit a public utility's liability in connection with
provision of utility services.3' As noted above, the Commission's conclusion is
consistent with the majority of other jurisdictions, where state regulators and the courts
have not only concluded that liability limitations are legal, but have also approved their
use to protect utilities and their customers.
Simplot cites Sfrong v. Western lJnion Telegraph33 and Rawtings v. Layne &
Bowler Pump Companf4 for the proposition that "express agreements exempting one
of the parties for negligence are to be sustained except where: (1) one party is at an
obvious disadvantage in bargaining power; (2) a public duty is involved (public utility
30 HL & e 995 s.w.2d at 675.
" Case No. CON-T-89-2, Order No. 22812 at p. 3 (Oct 30, 1989). See l.C. S 61-502
(Commission given authority over rules, regulations, practices and contracts of utilities affecting rates);
S 61-503 (Commission given authority to fix appropriate rules, regulations, contracts or practices for
public utilities); S 61-507 (Commission given authorityto prescribe rules and regulationsfor performance
of any service or the furnishing of any commodity); S 61-515 (Commission given safety authority).
3'Case No. CON-T-89-2, Order No. 22812 at p. 3 (Oct 30, 1989).
33 Strong v. Western union Tetegraph Co.,18 ldaho 389, 1Og P. 910 (1910).
3a Rawlings v. Layne & Bowter Pump Company, g3 ldaho 496, 465 P.2d 1OT (1970).
IDAHO POWER COMPANY'S COMMENTS - 11
companies, common carriers).'35 While ldaho Power is indeed a public utility,36 Simplot
does not have an obvious disadvantage in bargaining power. Simplot is a multinational
company with approximately six times3T the annual revenues and five times the
employees of ldaho Power. Moreover, ldaho Power does not seek to be "exempted"
from damages caused by its negligence. In fact, Simplot has negotiated with ldaho
Power in Section 11.3 of the special contract such that Idaho Power would pay direct
damages up to 150 percent of Simplot's total annual contract charges in the event they
are incurred due to ldaho Power's negligence. Therefore, the special contract in this
case does not run afoul of Strong and Rawlings.
D. Limitations of Liabilitv Are Common in Commercial Contracts.
Limitations on liability are not only commonplace in utility tariffs, they often
appear in general commercial and construction contracts as well. Generally, both
parties desire limitations on liability. For instance, if Simplot were to negligently cause
damage to ldaho Power's facilities that resulted in an outage, Simplot's liability would be
limited to 150 percent of the annual charges under the contract; Simplot would not be
liable for consequential damages associated with Idaho Powe/s inability to serve other
customers or lost profits. Based on a review of just those documents that are publicly
available, Simplot's own contracts provide for a waiver of consequential damages and
35 rd. ar499-500, 46sP.2d 107.
'u ldaho Code $ 61-219 defines a "public utility" as including "electrical corporations." According
to ldaho Code $ 61-119, an "electrical corporation" refers to every corporation that owns, controls,
operates, or manages any electric plant for compensation within the state of ldaho.
37 Forbes.com currently ranks Simplot as America's 61't largest private company with
approximately $6 billion in revenues and 10,000 employees during the fiscal year ending August 30,
2013.
IDAHO POWER COMPANY'S COMMENTS - 12
limitation on direct damages from the terms of use governing its website3s to the terms
that govern the use of its products.3e
ldaho Power's contracts often contain these provisions as well; the contract for
construction of its Langley Gulch power plant limited direct damages to 25 percent of
the contract price (Section 26.1(a)) and included a complete waiver of incidental,
punitive, and consequential damages (Section 26.2).40 The Commission has reviewed
and approved power purchase agreements that limit the parties' liability such as those
for the Potlatch Corporational and U.S. Geothermal.a2 Other special contracts approved
by this Commission have had provisions limiting Iiability, including those for Hoku
Materials, lnc.,43 FMC Corporation,aa and the Monsanto Company.as
t' J.R. Simplot Terms and Conditions, simplot.com, http://www.simplot.com/terms conditions (last
updated August 6, 2013).
" Simp/of ColorPack, Six tron 12-O-0, simplot.com, htto://techsheets.simplot.com/Partners/Six lron.pdf
(last visited March 27,2014).
ao Contract for Engineering, Procurement and Construction Services between tdaho Power
Company and Boise Power Partners Joint Venture Consrsfrng of Kewit Power Engineers Co. and TIC -
The lndustrial Company and ldaho Power Company for Langley Gulch Power Plant, March 7,2009,
sec.gov, http://www.sec.qov/Archives/edqar/data/49648/000105787710000150/a10-22214 1ex10d44.htm (last
visited March 27, 2014).
o1 ln the Matter of the Joint Petition of Avista Corporation and Pottatch Corporation for Approval of
Power Purchase and Sale Agreement, Case No. AVU-E-02-08, Order No. 29418 (Section 13 provided for
waiver of "any special, incidental, punitive, exemplary or consequential loss or damage whatsoever").
o' ln the Matter of the Application of ldaho Power Company for Approval of an Agreement to
Purchase Capacity and Energy form USG Oregon, LLC and Authorize Recovery in the Company's Power
Cost Adjustment, Case No. IPC-E-09-34, Order No. 31087 (Section 23.3 limiting liability to direct actual
damages and holding neither party liable "for consequential, incidental, punitive, exemplary or indirect
damages, lost profits or other business interruption damages . . .").
o' ln the Matter of the Application of ldaho Power Co. for Approvat of a Special Contract to Suppty
Electrical Powerto Hoku Materials, /nc., Case No. IPC-E-08-21, Order No.30697 (Section 12 provided
that "Neither party shall, in any event, be liable to the other for any special, incidental, exemplary,
punitive, or consequential damages").
* ln the Matter of the Application of ldaho Power Co. and FMC Corporation for Approval of a
Specra/ Contract for Service, Case No. IPC-E-97-13, Order No. 27463 (Section 14.2 provided that
damages are limited to actual damages caused by the Company and do not include consequential or
indirect damages).
IDAHO POWER COMPANY'S COMMENTS - 13
ldaho Power does not seek to exclude liability from all damages; rather, it seeks
to limit those categories of damages that are potentially significant and outside ldaho
Power's ability to predict or control. Because of the difficulty inherent in forecasting
potential damages at the time of contracting and increasingly large damages awarded
by juries, provisions that limit liability now regularly appear in business contracts.
E. Limitations of Liabilitv Provisions in the Simplot Special Contract Are Not
Discriminatorv.
ldaho Power updated its special contract template to reflect current commercial
practices; it did not single out the Simplot Caldwell facility for different treatment.
Although Simplot argues that the proposed limitation of liability provisions would be
discriminatory as to other special contracts, this is not correct because each special
contract is treated as a distinct rate class of one customer. The ldaho Supreme Court
interpreted ldaho's utility anti-discrimination statute, tdaho Code S 61-315,46 in the tdaho
Sfafe Homebuilders v. Washington Water Power decisionaT and identified cost-of-
seryice, quantity of electricity used, differences in conditions of service, or the time,
nature, and pattern of use as appropriate justifications for setting different rates and
charges to different customers. The Commission has subsequently adhered to those
a5 ln the Matter of the Application of PacifiCorp, dba Rocky Mountain Power for Approvat of an
Electric Service Agreement with Monsanto Company, Case No. PAC-E-06-09, Order No. 30197 (Section
10.2 provided that "PacifiCorp shall not be liable for any physical damages, economic losses, costs, or
damages resulting therefrom, including but not limited to special, indirect, incidental, consequential,
punitive or exemplary damages.").
ao ldaho Code $ 61-315 states, "Discrimination and preference prohibited. No public utility
shall, as to rates, charges, service, facilities or in any other respect, make or grant any preference or
advantage to any corporation or person or subject any corporation or person to any prejudice or
disadvantage. No public utility shall establish or maintain any unreasonable difference as to rates,
charges, service, facilities or in any other respect, either as between localities or as between classes of
service. The commission shall have the power to determine any question of fact arising under this
section."
o' ldaho State Homebuilders v. Washington Water Power,107 ldaho 415, 690 P.2d 350 (1984).
IDAHO POWER COMPANY'S COMMENTS - 14
enumerated factors "as guidelines for the Commission to use to evaluate whether there
is a reasonable justification for setting different rates and charges for different classes of
customers."48
The Commission has generally affirmed4e the use of special contracts for larger
customers, indicating that it was "supportive of any type of pricing that is responsive to
customer needs so long as the net revenues collected from those customers are fair
and do not place an undue burden on other customers."so Specific to ldaho Power, the
Commission has found "a large customer whose aggregate electric load exceeds
20,000 kW can have a significant impact on the Company's ability to manage or serve
that load."sl Thus, the Commission approved ldaho Power's Schedule 19, Large Power
Service, requiring customers with an aggregate power requirement receiving service at
one or more points of delivery on the same premises that exceeds 20,000 kilowatts "to
make special contract arrangements with the Company."52
Even Simplot admits that "some of ldaho Power's special contract customers do
have similar clauses in their agreements r53 ln fact, Simplot itself agreed to a
4 Case No. IPC-E-95-18, Order No. 26780 at 7 (Feb 6, 1997).
o'Under tdaho Code SS 61-502 and -503, the Commission has jurisdiction to fix new contract
rates and review existing contracts; on its own motion, the Commission can investigate rates or practices
and order them changed.
t0 Case No. GNR-E-96-1, Order No. 26555 at 8 (Aug 16, 1996).
u' Case No. IPC-E-10-23, Order No. 32132 at 5 (Dec 10, 2O1O).
'2 ld.,l.P.U.C. No. 29,Tariff No. 101, Originalsheet No. 19-1.
53 Simplot Answer at 2; see a/so footnotes 43-45.
IDAHO POWER COMPANY'S COMMENTS - 15
waiver of consequential damages in its Pocatello special contract.sa While staggered
contract terms prevent slmultaneous renegotiation to modernize liability terms, ldaho
Power anticipates additional special contracts will be negotiated in the near term such
that resolution of this issue can be incorporated into those new special contracts.
F. ldaho Power's Rule J Does Not Obviate the Need for Additional
Protections.
Simplot argues that ldaho Power's Rule J, Continuity, Curtailment and
Interruption of Electric Service,ss can adequately address ldaho Powe/s concerns.
While Rule J is appropriate for the typical consumer whose potential damages pose a
more modest risk to the Company, Rule J is simply insufficient to adequately reduce the
risk for the Company and its customers of potential liability under a special contract.
Rule J limits the Company's liability for interruption of service caused by acts of God
(commonly known as force majeure provisions) and the Company's "repair,
maintenance, improvement, renewal or replacement work"; it does not adequately limit
contract and warranty claims, and explicitly states that "the provisions of this rule do not
affect any person's rights in tort."56
Simplot also argues that the proposed special contract provisions are in conflict
with Rule J.57 This argument is inapposite because Simplot is not seeking service
under Idaho Powe/s tariffs. Rather, Simplot has requested a special contract, the
uo ln the Matter of the Application of tdaho Power Co. for Approval of an Agreement for Etectric
Service Between ldaho Power Co. and the J.R. Simplot Co., Case No. IPC-E-04-17, Order No. 29576
(Section 12.1 provided, "ln no event shall either Party be liable to the other for any indirect, incidental,
special, or consequential damages of any character including, without limitation, damages for lost profits
or work stoppages.").
55 l.P.U.C. No. 29, Tariff No. 101, Original Sheet No. J-1.
u' rd.
57 Simplot Answer at 8.
IDAHO POWER COMPANY'S COMMENTS - 16
terms of which will, by design, differ from the terms of ldaho Power's tariffs. lndeed, if
Simplot wanted to avail itself of the protections afforded by Rule J, then it could accept
service under ldaho Power's Schedule 19 to the extent that its load does not exceed 20
megawatts ("MW").58
lf Simplot's Caldwell facility exceeds 20 MW, two options exist: (1) include the
Company-requested limitation of liability provisions in the special contract such that it
and the associated Schedule 33 tariff would governse in place of Rule J, subsection 360
or (2) address the liability risk through Simplot's Caldwell cost-of-service rate schedule.
However, to the extent ldaho Power must secure additional liability insurance to serve
Simplot in the event the Commission denies ldaho Powe/s request, the Commission
should direct Simplot to provide ldaho Power with location-specific detail6l related to
potential loss so that the Company may procure a Simplot-specific insurance policy and
include the associated expense in the specia! contract's cost-of-service analysis and
ultimate revenue requirement determination.
ut ldaho Power does not know if or when Simplot's total electric load for its Caldwell facility might
exceed 20 MW. However, based upon Simplot's request for additional capacity to be available by
January 31,2014, ldaho Power completed the facilities needed to provide the requested capacity on
January 8,2O14.
5e See l.P.U.C. No. 29, Tariff No. 101, Original Sheet No. A-1 ("These Rules and Regulations are
a part of the Tariff of ldaho Power Company and apply to the Company and every Customer to whom
service is supplied; provided, that in case of conflict between these Rules and Regulations and the
provisions of any schedule of this Tariff, the provisions of such schedule will govern as to service
supplied thereunder.") (Emphasis added).
6o |.P.U.C. No. 29, Tariff No. 101, Original Sheet No. J-1. Subsection 3 of Rule J states, "The
provisions of this rule do not affect any person's rights in tort."
u' For ldaho Power to estimate the amount of insurance necessary at the Caldwell facility in the
absence of limited liability, Simplot would need to provide ldaho Power with information regarding its
operations, property value, business income, etc.
IDAHO POWER COMPANY'S COMMENTS - 17
G. Simplot's Alternative Limitation of Liabilitv Lansuase ls lnsufficient.
Simplot also suggests the Commission order ldaho Power to offer language that
is used in the Micron Technology, lnc., special contract, to wit:
Each party agrees to protect, defend, indemnify and hold
harmless the other party, its officers, directors, and
employees against and from any and all liability, suits, loss,
damage, claims, actions, costs, and expenses of any nature,
including court costs and attorney's fees, even if such suits
or claims are completely groundless, as a result of injury to
or death of any person or destruction, loss or damage to
property arising in any way in connection with, or related to,
this Agreement, but only to the extent such injury to or death
of any person or destruction, loss or damage to property is
not due to the negligence or other breach of legal duty of
such other party; provided, however, that each party shall be
solely responsible for claims of and payment to its
employees for injuries occurring in connection with their
employment or arising out of any workman's compensation
law.62
This indemnity provision is substantially similar to Section 11.1 of the proposed special
contract, which Simplot and Idaho Power already agreed to. While ldaho Power agrees
that this language is a reasonable mutual indemnification clause, it does not address
the magnitude of each party's liability with regard to consequential damages or a
limitation of direct damages.
II. CALCULATION OF SIMPLOT'S SPECIAL CONTRACT RATES
A. Simplot's Special Gontract Rates Were Calculated throuqh a Cost-of-
Service Studv Specific to the New Caldwell Site.
On page 11 of its Answer, Simplot stated its belief that ldaho Power did not
conduct a cost-of-service study to support the rates in the special contract. Rathei than
conducting a full cost-of-service study, Simplot mistakenly believed that the Company
62 Simplot Answer at 11.
IDAHO POWER COMPANY'S COMMENTS. 18
updated the inputs used to calculate Schedule 19 rates in its last general rate case,
Case No. !PC-E-11-08 (2011 Rate Case"), to arrive at a rate forSimplot's new special
contract.63 Contrary to this belief, ldaho Power did indeed perform a cost-of-service
study specific to Simplot's new special contract based on the expected cost to serve the
new Caldwell plant. Due to this apparent misunderstanding, ldaho Power met with
representatives from Simplot and the Commission Staff on March 10, 2014, to clarify
the cost-of-service methodology actually used to calculate the rates in the proposed
Agreement. While ldaho Power believes this meeting was informative to all parties, the
Company feels it is appropriate to reiterate its cost-of-service methodology in these
Comments.
Before describing the specific steps in the cost-of-service process, however, it is
important to first note the overall objective in developing a special contract rate.
According to ldaho Powe/s Rule C, Service and Limitations,6a and Schedule 19, Large
Power Service,65 special contract arrangements are required for customers whose
aggregate load is greater than 20 MW. The magnitude of these customers' size and
shape of their load may have significant impacts on the Company's hourly operations
and the performance of ldaho Power's overall electrical system. Due to the potential
system impact of a new large load, and because the cost-of-service study is used to set
rates for all customers, all rate classes are potentially impacted when the Company
63 rd.
6o l.P.U.C. No.29, Tariff No. 101, Original Sheet No. C-2 ("Special contractarrangementwill be
required when a Customer's aggregate power requirement exceeds 20,000 kW.").
uu l.P.U.C. No. 29, Tariff No. 101, Original Sheet No. 19-1 ("lf the aggregate power requirement of
a Customer who receives service at one or more Points of Delivery on the same Premises exceeds
20,000 kW, the Customer is ineligible for service under this schedule and is required to make special
contract arrangements with the Company.")
IDAHO POWER COMPANY'S COMMENTS - 19
acquires a new large load. lf a contract is not designed properly, the addition of a new
large load can unduly impact rates for all customers. Consequently, two primary goals
when determining rates for a new large load are to charge rates that are reflective of
cost and to ensure that other customer classes are not unduly harmed.
The cost-of-service study for a new large load utilizes the same methodology as
the cost-of-service study filed in a general rate case. A stand-alone single customer
study is not performed; rather, the existing study is customized to incorporate a new
large load into the Company's system. !n this case, the process for determining the
proposed Simplot special contract rates was no exception. The starting point for this
calculation was the cost-of-service study reflecting the final stipulated results of the
2011 Rate Case. At a high level, this study was modified to reflect the removal of the
three existing Simplot Schedule 19P locations (Aberdeen, Nampa, and Caldwe!!), which
will close when the production at the new Caldwell facility is fully operational, and the
addition of the new Simplot special contract as an individual rate class. This modified
study resulted in contract rates specific to the new Simplot special contract reflecting the
final approved revenue requirement and cost-of-service methodology from the
Company's most recent general rate case.
To execute the modifications summarized above, the 2011 Rate Case study was
first adjusted to remove the demand and energy values for the three existing Simplot
locations from the Schedule 19P allocation factors in both the jurisdictional separation
study ("JSS') and the class cost-of-service study. Demand and energy values provided
by Simplot for the new Caldwell facility were then utilized to determine the appropriate
demand and energy allocation factors for the new Simplot special contract, which were
then used to update the JSS and class cost-of-service study. Customer-related
IDAHO POWER COMPANY'S COMMENTS - 20
allocation factors were also recalculated to reflect the removal of the three existing
Simplot sites from Schedule 19P and the addition of the new Simplot special contract.
Once these factors were updated, all energy-related, demand-related, and customer-
related components of the Company's revenue requirement approved in the 2011 Rate
Case were allocated to the new Simplot specia! contract customer in Caldwel! according
to the Company's2011 Rate Case methodology.
For the assignment of distribution substation plant, Simplot's Caldwell facility
required a transformer upgrade to accommodate the new load at a cost of $2.4 million.
Because Simplot was required to fund the substation upgrade up-front through a
contribution-in-aid-of-construction ('CIAC'), the Company added the substation
investment of $2.4 million to Account 362 as well as a fully offsetting CIAC amount.
Both the investment and the offsetting CIAC were directly assigned to the new Simplot
special contract in accordance with the cost-of-service methodology utilized in the 2011
Rate Case. Due to the eventual closure of the Nampa, Aberdeen, and Caldwell sites,
and given Simplot's desire to obtain full ownership of facilities currently subject to
facilities charges, the Company also removed all direct assignment of facilities charge-
related distribution plant to Schedule 19P for the three existing Simplot locations. By
removing this direct assignment, existing plant from these three locations became
"system" plant subject to allocation to all rate classes. Facility charge revenue
associated with this plant was removed as well. ln addition to the transformer upgrade,
a metering package estimate of $24,000 was added to Account 370 and directly
assigned to the new Simplot special contract in the same manner as meter investment
for all of the Company's special contract customers.
IDAHO POWER COMPANY'S COMMENTS - 21
Again, the Company's approach to calculating rates for the Simplot special
contract was to modify the class cost-of-service study from the 2011 Rate Case to
reflect the removal of the three existing Simplot customers and the addition of the new
Simplot specia! contract. The result of this updated cost-of-service analysis was the
determination of an annual revenue requirement for the new Simplot Caldwell facility of
$8,302,325. This, however, represented a revenue requirement based upon the
updated cost-of-service study from the 2011 Rate Case and, since that time, the
Company has had a number of single-issue rate cases where base rates were adjusted.
Specifically, the Company's base rates for all of its customers have been adjusted to
reflect Commission orders for the Open Access Transmission Tariff ("OATT') deferral
adjustment,66 the depreciation study adjustment,oT the Boardman balancing account
adjustment,6s and, most recently, the Langley Gulch power plant adjustment.oe
ln order to determine a revenue requirement for the new Simplot facility that is
equivalent to the costs currently being recovered from all of the Company's other rate
classes, ldaho Power made an adjustment to the revenue requirement determined from
the cost-of-service analysis. The Company determined that an additional $645,790 of
revenue requirement was needed, resulting in a total revenue requirement for the new
Caldwell facility of $8,948,115. The $645,790 adjustment was derived in two steps.
First, the Company determined the per unit level of incremental cost recovery approved
by the Commission for Simplot's existing three facilities since the 2011 Rate Case.
uu Case No. iPC-E-12-06, Order No. 32540 (Apr 27,2012).
u' Case No. IPC-E-12-08, Order No. 32559 (May 31 ,2012).
ut Case No. IPC-E-12-09, Order No. 32549 (May 1 7,2012).
un Case No. IPC-E-12-14, Order No. 32585 (Jun 29, 2012).
IDAHO POWER COMPANY'S COMMENTS -22
Second, that per unit level of approved recovery was applied to Simplot's projected
energy sales for the new Caldwell facility to determine the required adjustment. The
Company then spread the additional revenue requirement to the functionalized
generation, demand, energy, and customer billing determinants of Simplot's revenue
requirement results from the class cost-of-service study described above.
The rate design proposed by the Company to recover the required revenue of
$8,948,115 is a seasonal rate design, based upon the demand and energy unit costs for
a summer and non-summer season, similar to the seasonal rate designs for the
Company's other retail classes. While a special contract typically does not have a
service charge billing component, two of the Company's three current special contracts
include a Contract Demand billing component intended to recover a portion of the
demand-related costs associated with providing the facilities and capacity requested by
the customer. For Simplot's special contract for the Caldwell facility, a Contract
Demand Charge based upon the requested 30 MW of capacity was determined. The
Company's methodology for determining the Contract Demand Charge was based upon
the same methodology used to derive standby reservation charges for Schedule 45,
Standby Service.To The remaining demand-related costs are reflected in the seasonal
monthly billing demand charge.
B. The Proposed Special Contract Rates Are Consistent with Previous Cost-
of-Service Determinations and Are in the Public lnterest.
The cost-of-service analysis is used to determine rates for all of the Company's
customer classes. Within the Company's class cost-of-service methodology, each
special contract customer is considered an individual rate class so that the costs
'0 l.P.U.C. No. 29, Tariff No. 101, Original Sheet No. 45-1.
IDAHO POWER COMPANY'S COMMENTS - 23
incurred to serve that customer are assigned to that customer alone and not spread to
other customers. The Company currently has three special contract customers: Micron
Technology, lnc.; the United States Department of Energy ldaho Operations Office; and
the J. R. Simplot Company plant in Pocatello, ldaho. For each of these special
contracts, a similar cost-of-service study was initially performed to establish the rates for
the contract term; it is also performed each time the Company files a general rate case.
Over time, as revenue requirements are ultimately determined and rate allocation is
ultimately ordered by the Commission, each of the customer classes may move closer
to or farther from its cost-of-service. Currently, the Company's three special contract
customers' rates are below the level required to recover their full cost-of-service. lt is
not reasonable for Simplot to expect to receive rates below cost-of-service just because
other customers are paying less than their current cost-of-service.
ln addition, the cost to serve each specia! contract customer is unique to that
customer, reflective of the costs incurred to serve each customer's specific load
requirements. Simplot's assertion that a special contract for its new Caldwell facility
should start with "the average of the current three special contract customers cost of
service study and then make the same adjustments for Langley Gulch etc."71 is not
based upon the anticipated costs to be incurred by the Company to serve Simplot's
Caldwell load. Moreover, it would likely result in rates below the cost-of-service
determination in the Company's next genera! rate case. As stated above, because the
Company's cost-of-service study is used to determine rates for all customer classes,
establishing rates in this case that are below cost-of-service would unduly shift revenue
71 Simplot Answer at 12.
IDAHO POWER COMPANY'S COMMENTS.24
requirement responsibility to other rate classes if the new Simplot special contract is not
moved to full cost-of-service in the Company's next general rate case.
Overall, the Company's approach is consistent with previous cost-of-service
determinations used to establish rates for each of the Company's current special
contracts. It is also consistent with the Company's overall objective of proposing a rate
design based on a defensible study that can demonstrate that the special contract is in
the public interest and existing customers will not be unduly harmed.
!t!. coNcLUStoN
Given the rise in extremely large jury verdicts and the potential magnitude of
damages that could be sought by a special contract customer, ldaho Power believes the
Commission should determine whether it continues to be appropriate for ldaho Power
and its customers to act as an indemnity for sophisticated industrial customers with
access to business interruption insurance. The Company has set forth reasonable
limitation of liability Ianguage in the proposed special contract that is consistent with
prudent energy contract procedures and market standards. ldaho Power respectfully
requests the Commission approve the terms of the special contract as proposed by
ldaho Power in Attachment 1 to its Application without change or condition.
ln the alternative, if the Commission determines that it is reasonable for the
Company to continue assuming the risk for unlimited direct damages and consequential
damages associated with Simplot's business, ldaho Power requests an opportunity to
re-examine the terms of the special contract, including, but not limited to, a cost-of-
service that appropriately reflects this assumption of risk. The Commission should also
direct Simplot to provide ldaho Power with location-specific detail related to potential
IDAHO POWER COMPANY'S COMMENTS - 25
loss so that the Company may procure a Simplot-specific insurance policy and include
the associated expense in the special contract's cost-of-service analysis and ultimate
reven ue requirement determination.
lf the Commission limits liability for special contract customers as proposed by
ldaho Power, the Company also requests the Commission approve the seasonal rates
shown in Schedule 33, Attachment 2 to its Application. These rates are reflective of the
detailed cost-of-service analysis performed by the Company based on the expected
cost to serve the specific load requirement at Simplot's new Caldwell plant. The
Company's approach is consistent with previous cost-of-service determinations used to
determine the rates for each of the Company's other special contract customers. The
costs to serve each of these customers are unique to each customer and reflective of
the costs incurred to serve each custome/s specific capacity requirements. This same
methodology, used to determine the rates to serve the specific load requirements at
Simplot's new Caldwell facility, is consistent with the Company's overall objective of
proposing a rate design based on a defensible study that is reflective of the costs to
serve the specific customer's load and ensures that existing customers will not be
unduly harmed.
Respectfully submitted this 28th day of March 2014.
Attomey for ldaho Power Company
IDAHO POWER COMPANY'S COMMENTS.26
GERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 28th day of March 2014 I served a true and
conect copy of IDAHO POWER COMPANY'S COMMENTS upon the following named
parties by the method indicated below, and addressed to the following:
Gommission Staff
Kristine A. Sasser
Deputy Attomey General
ldaho Public Utilities Commission
472 W esl Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
J. R. Simplot Company
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27h Street
Boise, ldaho 83702
X Hand Delivered
U.S. Mail
Overnight Mail
FAX
Email kris.sasser@puc. idaho.oov
Hand Delivered
U.S. Mai!
Ovemight Mail
FAXX Email [e-mail]
oreo@richard sonadams. com
IDAHO POWER COMPANY'S COMMENTS - 27