20220525Final_Order_No_35415.pdf

ORDER NO. 35415 1

Office of the Secretary
Service Date
May 25, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On April 9, 2021, Idaho Power Company (“Company”) applied for Commission
approval of its first capacity deficiency date determination for avoided cost calculations under the
Public Utility Regulatory Policies Act of 1978 (“PURPA”) and Order Nos. 32697, 33084, 33159,
and 34659. Based on its second amended 2019 Integrated Resource Plan (“IRP”) the Company
asked for Commission approval of the capacity deficiency period with a first deficit occurring in
August 2028.
On April 28, 2021, the Commission issued its Notice of Application and Notice of
Modified Procedure setting public comment and Company reply deadlines. Order No. 35023.
On June 10, 2021, the Industrial Customers of Idaho Power (“ICIP”) intervened. On
June 14, 2021, Idaho Hydroelectric Power Producers Trust dba IdaHydro (“IdaHydro”) intervened.
The Commission granted intervention to the ICIP and IdaHydro. See Order No. 35084.
On June 25, 2021, the Commission issued Notice of Modified Procedural Schedule
setting new comment deadlines. See Order No. 35091.
This matter appeared on the Commission’s Decision meeting agenda on October 12,
2021, as a fully submitted matter.1
On December 10, 2021, IdaHydro filed a motion seeking order setting a capacity
deficiency date in summer 2023. On December 27, 2021, the Company responded to IdaHydro’s
motion requesting the Commission deny IdaHydro’s motion.
On February 4, 2022, the Company filed a motion and amended application (“Amended
Application”). On February 15, 2022, IdaHydro filed supplemental information to support its
position that no additional process was necessary.
IdaHydro’s motion and the Company’s motion appeared on the agenda for the
Commission’s March 9, 2022, Decision Meeting under Matters in Progress. At the decision

1 No final order was issued following the October 12, 2021 deliberation.
IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
APPROVAL OF THE CAPACITY
DEFICIENCY TO BE UTILIZED FOR
AVOIDED COST CALCULATIONS
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CASE NO. IPC-E-21-09

ORDER NO. 35415

ORDER NO. 35415 2

meeting, a motion was made and seconded to move the matter to fully submitted since the matter
was technically closed when the various motions and Amended Application were filed.
On March 15, 2022, the Commission issued a Notice of Amended Application and
established deadlines for interested persons to comment on the Amended Application and for the
Company to reply. Order No. 35346.
Staff and IdaHydro filed comments on the Amended Application to which the
Company replied.
Having reviewed the record in this case, we now issue this final Order setting the
Company’s first capacity deficit date in July 2023.
BACKGROUND
Under PURPA, the Commission has established a surrogate avoided resource (“SAR”)
method and an IRP method to calculate avoided cost rates for qualifying facilities (“QFs”). Under
both methods, a QF receives capacity payments only after the applicable capacity deficit date is
reached. Order Nos. 33377, 33159, and 33898. The first deficit date under the IRP method will
float (change) to reflect the changes in the QF queue, while the first deficit date under the SAR
method will not float to reflect the changes in the QF queue. Order No. 33933.
The capacity deficiency period is determined through the IRP planning process and is
submitted to the Commission in a proceeding separate from the IRP docket. The capacity deficit
date determined in the IRP process is presumed to be correct as a starting point but will be subject
to the outcome of the capacity deficiency case. Order No. 32697.
THE APPLICATION
The Company stated it filed this Application at the Commission’s direction to initiate
a case outside its IRP filing for the establishment of the capacity deficiency period to be utilized
in the utility’s SAR method. Application at 2; see also Order No. 32697. Further, the Company
asserted in the Application that in Order No. 33159, the Commission found it just and reasonable
to utilize the same first capacity deficit determination for purposes of the incremental cost IRP
method. Id. at 3. The Company also asserted that in Case No. PAC-E-17-09, the Commission
modified Order No. 32697 by stating “that each Idaho electric utility shall submit its updated
capacity deficiency filing after the Commission has acknowledged its IRP report, rather than upon
its IRP filing, thus amending Order No. 32697.” Order No. 33917 at 4. The Company also alleged
“the Commission determines it is prudent for the Company to file its first capacity deficiency cases

ORDER NO. 35415 3

upon IRP acknowledgement.” Order No. 34649 at 4. The Company represented that on March 16,
2021, the Commission issued Order No. 34959 acknowledging the Company’s Second Amended
2019 IRP (“2019 IRP”). Application at 3.
The Company represented the 2019 IRP indicates its first capacity deficiency period
will begin in August 2028 and explains how this capacity deficiency period was calculated. Id. at
3. The Company asserted that for the 2019 IRP, it used long-term capacity expansion modeling
(“LTCE”), a departure from the prior practice of creating resource portfolios to eliminate resource
deficiencies shown by a load and resource balance. Id. To calculate its capacity deficiency period
for PURPA avoided cost calculations, the Company explains that its “load and resource balance
has been determined based on the [Company’s] system as modeled in the 2019 IRP.” Id.; see Case
No. IPC-E-19-19, Order No. 34959 (acknowledging the Company’s 2019 IRP).
The Company asserted it examined assumptions in the Cogeneration and Small Power
Production (“CSPP”) forecast about the inclusion or exclusion of replacement Energy Sales
Agreements (“ESA”) over past Company IRPs. Id. at 4. The Company also represented it plans to
perform a more in-depth review and sensitivity analysis of its replacement ESA assumptions in
the 2021 IRP. Id. The Company asserted that the impact of different assumptions regarding
whether existing PURPA generation will, or will not, enter new PURPA contracts upon the
expiration of their existing contracts is being considered as part of the 2021 IRP. Id. at 5. The
Company represented its 2021 IRP is in the early stages of development and, as such, the ESA
replacement sensitivity analysis has not yet been conducted. Id.
For purposes of updating the first capacity deficit for use in avoided cost calculations
based upon the 2019 IRP, the load and resource (“L&R”) balance has been determined based on
the Company’s system as modeled in the acknowledged 2019 IRP. Id. The Company asserted that
the 2019 IRP shows a first capacity deficiency of approximately 14 megawatts (“MW”), occurring
in August 2028. Id. The Company requested that a first capacity deficit of August 2028 be utilized
for avoided cost calculations for both the SAR and IRP methods. Id.
APPLICATION COMMENTS
Consistent with the comment deadlines established in Order No. 35091 the parties filed
timely comments on the Application.

ORDER NO. 35415 4

IdaHydro requested the Commission set the capacity deficit date in mid-summer 2023
which it offered was congruent with the Company’s notice of intent to seek requests for proposals
to fill a projected capacity need as early as summer 2023.
Staff believed the Company should update the first capacity deficit date from the 2019
IRP which was the basis of the Company’s Application. Staff recommended the Company:
• Utilize the most recent load forecast developed by the Company;
• Reduce the amount of Market Purchases from southern pathways by 310
MW and only include 50 MW starting in 2021;
• Allow non-PURPA PPAs to expire on their actual expiration dates;
• Reflect contract changes since the preparation of the L&R balance, which
include PURPA contract updates identified in Response to Staffs
Production Request No. 7 and approval of the Jackpot Solar contract; and
• Correct the capacity value of Valmy Unit 2 and Bridger.

Staff Comments at 10.
Staff also recommended that the Commission open a generic docket to determine the
timing of the deficiency date filing in relation to the timing of the IRP.
The Company replied to Staff and IdaHydro, acknowledging, “an apparent difference
between the first capacity deficit date that appears in the acknowledged 2019 Amended IRP (2028)
and that which is referenced in the Company’s Notice of Intent to seek requests for proposals and
the Request for Proposals itself seeking generation to meet an identified capacity deficit in 2023.”
Idaho Power Reply Comments at 2.
IDAHYDRO’S MOTION
IdaHydro’s December 10, 2021 motion asks the Commission to set the Company’s
capacity deficiency date in summer 2023. IdaHydro cited the Company’s concurrence that summer
2023 was the correct capacity deficiency date. IdaHydro’s motion was based on the Company’s
subsequent Case No. IPC-E-21-41 filed on December 3, 2021, seeking Commission approval to
begin resource procurements to meet a summer 2023 capacity deficit identified in the second
amended 2019 IRP. On February 15, 2022, IdaHydro filed a supplement to its motion—a copy of
the Company response to IdaHydro’s production request where the Company responded, “Idaho
Power’s 2021 [IRP] filed on December 30, 2021, indicates a first capacity deficit in July 2023.”
Second Declaration of C. Tom Arkoosh Exhibit A. Based on this statement, IdaHydro believed
this matter requires “no additional elaboration as to the appropriateness of setting the power
company’s first deficit date in the Summer of 2023.” IdaHydro Supplemental Information at 1.

ORDER NO. 35415 5

The Commission denied this motion. Order No. 35346.
THE AMENDED APPLICATION
The Company seeks a first capacity deficit of July 2023, based upon the 2021 IRP and
consistent with the request for proposals issued to meet deficits starting in 2023. The Company
states “the 2019 IRP was amended twice, and the Commission’s consideration and eventual
acknowledgement of the Second Amended 2019 IRP was considerably delayed.” Amended
Application at 5. Additionally, the Company notes the 2019 IRP was the first avoided cost capacity
deficit update since “the Commission changed filing requirements from the time at which the IRP
is filed to the time after which the IRP is acknowledged,” which it states resulted in a delay of the
Commission considering and setting its first capacity deficit. Id.
The Company’s Amended Application includes the L&R Balance Data from the 2021
IRP which shows capacity deficits of 101 MW in July of 2023, 186 MW in July of 2024, and 311
MW in July of 2025.
The Company requests a first capacity deficit date of July 2023 for both SAR and IRP
avoided cost calculation. The Company also requests that the Commission direct that future
capacity deficiency filings for avoided cost rates be made when the IRP is filed, rather than at the
time the IRP is acknowledged.
The Commission accepted this motion and issued additional procedure to supplement
and complete the record based on the updated information. Order No. 35346.
AMENDED APPLICATION COMMENTS
Staff, IdaHydro, and the Company filed comments on the Amended Application.
1. Staff Comments
Staff reviewed the Load and Current Resource Balance contained in the Company’s
Amended Application and recommended the following changes be made to the proposed L&R:
• Use the most recent load forecast developed by the Company with Brisbie’s
load removed and a 15.5% planning reserve margin (“PRM”) applied;
• Verify the capacity amounts of Brownlee Hydro and Shoshone Falls Hydro
facilities and make sure the correct capacity amounts are used in the L&R;
• Add Energy Efficiency (“EE”) Bundles to the L&R as an adjustment to load;
• Assume no renewals for PURPA wind projects unless the Company receives
information from the wind qualifying facilities indicating they plan to renew
their contract;
• Reflect the expiration date of Path C transmission capacity, unless the Company
has renewal rights;

ORDER NO. 35415 6

• Remove Boardman to Hemingway (“B2H”) and B2H-related transmission
capacity; and
• Include the capacity of Western Systems Power Pool (“WSPP”) market
purchases in the L&R, if not already included.

Staff recommended that the Company file an updated L&R incorporating these changes
and update the first capacity deficiency date according to the updated L&R. Staff argued the first
capacity deficiency date should be used in both SAR and IRP methods. Lastly, Staff recommended
that if the Commission decides to re-evaluate when capacity deficiency date cases should be filed,
a generic docket should be opened because the decision may need to consider factors affecting all
three Idaho electric utilities.
L&R Load Forecast
Staff argued that Brisbie’s load should be removed from the load forecast because
Brisbie’s load and resource are contingent upon one another. Until the Commission has approved
the Brisbie contract, neither the load nor resource should be included in the L&R balance according
to Staff.
Staff noted the Company changed its Loss of Load Expectation (“LOLE”) reliability
target from one-day in twenty years (1-in-20) to one-day in ten years (1-in-10) to account for the
extreme weather events that are becoming more frequent and increased uncertainty in year-to-year
water availability impacting hydro generation. According to the Company, a 1-in-10 LOLE target
is the industry standard for resource planning. However, Staff disagreed with the Company’s
justification used to change the new LOLE target in the Company’s IRP. Staff believed the
reliability target threshold should be determined independent of the Company’s loads and
resources and should be a policy decision based on the tolerance of customers and the public to
costs, risks, and other impacts related to electricity outages.
Staff believed it would be more appropriate to incorporate year-to-year variability in
the Company’s load forecast and availability of hydro generation rather than always assuming
average weather conditions in the IRP. According to Staff, the Company illustrated how weather
variability over just a four-year period dramatically affects the resources needed to ensure
reliability. Given the resulting 15.5% PRM is similar to the 15% PRM used in previous IRPs, Staff
believed that using average weather and hydro conditions, but compensating by using a more
stringent 1-in-20 LOLE target would achieve the same effect.

ORDER NO. 35415 7

L&R Resources
Staff’s review of the L&R resources focused on (1) Jackpot Solar, (2) the Brownlee
Hydro and Shoshone Falls Hydro facilities, (3) EE Bundles, (4) PURPA Wind Renewals, (5)
Thermal Plants, (6) Early Coal Plant Retirements, (7) Market Purchases with Secured Third-Party
Transmission, and (8) New Contract Changes.
Staff did not believe changes should be made to the proposed L&R due to the delay of
Jackpot Solar. Because the developers only anticipate a 40-day delay—which will occur during
the winter when the resource does not contribute capacity in the L&R—the project delay should
not impact the project’s capacity contribution to the system or the deficit date.
Staff recommended EE Bundles be added to the L&R as an adjustment to the load
forecast. The proposed L&R uses the EE amounts determined in the EE Potential Study as an
adjustment to load, which includes both the existing and future EE programs deemed to be cost-
effective from the Utility Cost Test. As stated in Staff’s first set of comments, all cost-effective
EE should be included, because utilities are expected to pursue all cost-effective EE. Staff believed
all cost-effective EE—whether identified from the EE Potential Study or from the modeling
process—should be included in the L&R, noting that it will not affect the determination of the first
capacity deficiency date because EE Bundles do not provide capacity until 2039.
Staff believed it is reasonable to assume no renewals for PURPA wind projects absent
the Company’s receipt of information from the wind QF indicating intent to renew. Therefore,
Staff recommended that the Company remove the 25% renewal rate in the proposed L&R and
include only the capacity for wind projects that have indicated intent to renew contracts upon
expiration. Staff’s position was based on the following: (1) the obstacles to wind renewals still
exist, which include the high cost of repowering wind facilities, reductions and/or elimination of
tax credits, and integration costs for wind; (2) wind project will either renew in total or not renew
its contract; it is unlikely that only 25% of a wind project will renew after a contract expires; and
(3) the Company’s communication with wind project owners did not provide a positive indication
of their intent to renew.
Staff believed the Company’s treatment of early coal plant retirements in the L&R was
reasonable because other than a planned exit of Valmy Unit 2 at the end of year 2025, there are no
early coal plant exits in the L&R. Staff remained committed to the position that “existing resources

ORDER NO. 35415 8

should reflect their authorized useful life unless early retirements are authorized; until then, any
resource decision not authorized by the Commission is speculative.” Staff comments at 7.
Staff’s review of Market Purchases with Secured Third-Party Transmission focused on
four components: (1) Capacity Benefit Margin (“CBM”), (2) Idaho-NV Energy Path, (3) Path C,
and (4) B2H assumptions.
Staff believed that the CBM contained in the L&R was reasonable because CBM is
used to lower the Company’s need for planning reserve margin to cover emergencies. The capacity
amount of CBM in the proposed L&R is 330 MW for the entire planning horizon. Staff believed
that this amount accurately reflects the magnitude of the greatest potential emergency on the
Company’s system and that the amount of CBM capacity included in the proposed L&R is
reasonable.
Staff believed capacity available through the Idaho-NV Energy path is reasonable (used
to import electricity generated at Valmy). However, access to firm transmission south of Valmy
currently does not exist. The Company reflects transmission access to Valmy until the Valmy exit
date in the L&R which Staff believed was reasonable for reflecting the actual transmission
circumstances.
Staff recommended the L&R be updated to reflect the expiration date of Path C
transmission capacity unless the Company has renewal rights. The Company has secured 50 MW
of transmission capacity between June and October to access Southwest markets through
PacifiCorp’s Path C and included it in the L&R for the entire planning horizon.
Staff recommended B2H-related transmission capacity should be removed from the
proposed L&R because it has not been authorized and therefore it is premature to include in the
L&R.
Staff recommended the L&R be adjusted to exclude three contracts that are currently
included. These consist of: (1) the Black Mesa 40-MW solar PPA has not been authorized by the
Commission; (2) Verde Light’s 2.95-MW solar project that has not been sufficiently subscribed to
receive final certification from Oregon; and (3) WSPP market purchases that may not impact the
proposed L&R because they may be covered by the “Market Purchases with Secured Third-Party
Transmission.” Id. at 10. Staff recommended that any impacts of the WSPP market purchases
should be reflected in the L&R, if not already included.

ORDER NO. 35415 9

Filing Schedule
Staff recommended that if the Commission decides to re-evaluate its direction for
capacity deficiency date case filings after acknowledgment of the IRP, a generic docket should be
opened and the decision should be made considering relevant factors impacting all three Idaho
electric utilities. Regardless of when the first capacity deficiency date case should be filed, Staff
believed the date should be determined based the latest and most accurate information as directed
by the Commission in previous orders.
2. IdaHydro Comments
IdaHydro noted that the Company initially sought a 2028 capacity deficit deadline in
this case, but later “found itself in need of more immediate new capacity, which caused it to file
the IPC-E-21-41 docket seeking permission to acquire capacity without employment of the
Commission's competitive procurement rules” before it ultimately filed in the Amended
Application seeking to set that date “no later than July 2023.” IdaHydro reply at 2.
IdaHydro suggested that Staff’s recommendations and the level of granularity Staff
requests the Company to include in its updated L&R are only relevant to the question of when the
Company may or may not be resource deficit, but notes this case is about when the Company is
currently slated be capacity deficient. IdaHydro argued that the Company will be resource deficient
in 2023 based on its admission that it is actively seeking to acquire capacity resources for that year.
IdaHydro explained that QFs have the right under PURPA to make their capacity
available to allow the utility to displace capacity acquisitions from other resources. IdaHydro
argues that if the Commission disregards the fact the Company is acquiring capacity in 2023 and
sets its first capacity deficit date for PURPA purposes after 2023, it will deprive QFs of a
“fundamental right that is guaranteed to them under federal law.” Id. at 4.
3. Company Comments
The Company represented that it conducted Staff’s recommended adjustments to the
L&R balance analysis noting that even with the recommended adjustments, there was no change
in the July 2023 first capacity deficit date. Because of this, the Company recommended the
Commission set the first deficit date for PURPA avoided cost pricing at July 2023.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, -502
and -503. The Commission is empowered to investigate rates, charges, rules, regulations, practices,

ORDER NO. 35415 10

and contracts of public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provision of law, and to fix the same by order. Idaho Code
§§ 61-502 and -503.
Under the foregoing authority, we have reviewed and considered the record, including
the Company’s Application and the associated comments and reply, IdaHydro’s motion, the
Company’s motion and Amended Application, Staff’s and IdaHydro’s comments on the Amended
Application and the Company’s reply.2 Based on the record, we find it fair, just, and reasonable to
set a first capacity deficit date of July 2023.
We understand a decision like this requires the parties to forecast and review
projections for a dynamic and evolving energy market—which is not a simple task. We also
recognize a decision like this can have a significant impact on certain parties, including customers
and generators. For these reasons, we prefer to make decisions based on the most recent, relevant,
and accurate information available. We commend the Company for updating its L&R with Staff’s
recommended adjustments to confirm that the correct capacity deficit date was supported in the
record. We appreciate the parties being patient and taking a second look at the issues in this case
to ensure the Commission has a record to make the most accurate decision for setting the first
capacity deficit date. Going forward all future L&R Balances must contain the most up-to-date
information for capacity deficit updates.
Finally, we direct Staff to meet with Avista, Idaho Power, and Rocky Mountain Power
(“Companies”) to consider the factors that impact the established filing date for capacity deficiency
date determinations. Additionally, Staff and the Companies should discuss preferred process,
procedure, and timing if the discussion merits requesting authorization to alter the capacity
deficiency date filing date. A new docket shall be opened to seek alteration of the capacity
deficiency date filing if the Companies seek such authorization.
O R D E R
IT IS HEREBY ORDERED that the Company’s Amended Application is approved.
IT IS FURTHERED ORDERED that all future L&R Balances included in the capacity
deficiency date update for avoided costs must contain the most up-to-date information available at
the time of filing.

2 The record in this case closed on October 12, 2021, when it was placed on the Commission’s October 12, 2021,
Decision Meeting Agenda as a “Fully Submitted” matter.

ORDER NO. 35415 11

IT IS FURTHER ORDERED that Staff shall meet with the Companies to review and
consider the factors that impact the established filing date of the capacity deficiency date. If
warranted, a docket shall be opened to seek authorization to alter the established date.
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. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 25th day
of May 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

/Abstain to Avoid Conflict/_____________
JOHN R. HAMMOND JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

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