20220513Reply Comments.pdf

JULIA A. HILTON
Deputy General Counsel and
Director of Legal
[e-mail]
May 13, 2022
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-21-17
In the Matter of Idaho Power Company’s Application for Authority to
Increase Its Rates for Electric Service to Recover Costs Associated with the
Jim Bridger Power Plant
Dear Ms. Noriyuki:
Enclosed for electronic filing please find Idaho Power Company’s Reply Comments
in the above-referenced matter.
If you have any questions about the attached document, please do not hesitate to
contact me.
Very truly yours,
Julia A. Hilton
JAH:sg
Enclosure
RECEIVED
2022 MAY13 PM 3:40
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S REPLY COMMENTS - 1
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]

Attorney for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
AUTHORITY TO INCREASE ITS RATES
FOR ELECTRIC SERVICE TO
RECOVER COSTS ASSOCIATED WITH
THE JIM BRIDGER POWER PLANT.

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CASE NO. IPC-E-21-17

IDAHO POWER COMPANY’S
REPLY COMMENTS

Idaho Power Company (“Idaho Power” or “Company”) respectfully submits the
following Reply Comments pursuant to Order No. 34053 in response to Comments filed
by Clean Energy Opportunities for Idaho (“CEO”) on April 14, 2022, and the Idaho Public
Utilities Commission (“Commission”) Staff, City of Boise, Industrial Customers of Idaho
Power (“ICIP”), Idaho Conservation League (“ICL”) and Sierra Club, and Micron
Technology, Inc. (“Micron”), on April 27, 2022. In the paragraphs that follow, Idaho Power
will respond to a number of issues raised by these parties in their Comments.

IDAHO POWER COMPANY’S REPLY COMMENTS - 2
I. BACKGROUND
1. The Jim Bridger Power Plant (“Bridger”) located near Rock Springs,
Wyoming consists of four generating units. PacifiCorp has two-thirds ownership and is
the operator of the facility. Idaho Power owns one-third, or 771 megawatts (“MW”)1 of
Bridger. Idaho Power’s one-third share of the units’ nominal net (or “net reliable”)
generation capacities are 177 MW, 180 MW, 174 MW and 175 MW, respectively. The
Company and PacifiCorp (collectively, the “Co-Owners”) work jointly to make decisions
regarding the plant, including required investments and the retirement of the plant.
2. Idaho Power is required to file an updated depreciation study within five
years of the Company’s previous depreciation study.2 Because nearly five years had
passed since the last update, the Company began preparations in early 2021 to file a new
depreciation study. Through these preparations, Idaho Power recognized that the
Second Amended 2019 Integrated Resource Plan (“IRP”) identified significant changes
with regard to the economic life of the Bridger plant, warranting the need for specific
review separate from the Company’s general depreciation filing. Changing conditions
have resulted in an expected exit from participation in operations of Bridger that is several
years earlier than what is currently reflected in customer rates. Given the complexity
associated with the acceleration of Bridger’s depreciation schedule and the
implementation of the proposed cost recovery mechanism, the Company felt that a
separate proceeding was appropriate.
3. In its Application filed on June 2, 2021, and its Amended Application on
February 16, 2022, Idaho Power requested authorization to (1) accelerate the

1 Generator nameplate rating.
2 Pursuant to Commission Staff’s recommendation in Case No. IPC-E-03-07.
IDAHO POWER COMPANY’S REPLY COMMENTS - 3
depreciation schedule for all coal-related Bridger investments to allow for full depreciation
and recovery by December 31, 2030, (2) establish a balancing account, and the
necessary regulatory accounting, to track the incremental costs and benefits associated
with Idaho Power’s cessation of participation in coal-fired operations at Bridger, and (3)
adjust customer rates to recover the associated incremental annual levelized revenue
requirement of $27.13 million with an effective date of June 1, 2022, which equates to an
overall increase of 2.12 percent.
II. IDAHO POWER’S REPLY
A. Idaho Power’s Investments through Year-End 2020 were Prudently Incurred.

4. There have been a number of investments required to operate Bridger in a
safe, efficient, and reliable manner, including investments to ensure environmental
compliance as well as a number of investments for routine maintenance and repair. Idaho
Power’s share of the investments made at Bridger since 2011, a total of 841 different
projects, totaled $266.3 million. The Company appreciates Commission Staff’s extensive
review of the capital investment documentation, finding that the “capital investments
through 2020 for the Jim Bridger power plant were prudently incurred.”3
5. ICL and Sierra Club however were critical of Idaho Power’s investments in
the Selective Catalytic Reduction (“SCR”) controls for Units 3 and 4, suggesting the
$109.9 million spent for compliance with the Clean Air Act Regional Haze Rules and
resulting Wyoming Regional Haze State Implementation Plan (“Wyoming SIP”) was
imprudent. In their Joint Comments, ICL and Sierra Club state that the Company failed
to “monitor rapidly changing economic conditions and change course when the SCRs

3 Staff Comments, p. 5.
IDAHO POWER COMPANY’S REPLY COMMENTS - 4
were no longer economically viable”4 and therefore Idaho Power should not be allowed a
return on the investments. ICL and Sierra Club however neglected to indicate that the
SCR controls on Bridger Units 3 and 4 were required to comply with the Wyoming SIP.
6. The Company has an obligation to operate its facilities in compliance with
its permit requirements and the applicable laws and regulations, as well as satisfy other
Idaho Power statutory requirements. In June 2013, the Company filed a request for a
Certificate of Public Convenience and Necessity (“CPCN”) with the Commission which
included an analysis supporting the upgrade of Units 3 and 4 to allow for the ongoing
coal-fueled energy production as the least-cost, least risk outcome for customers. With
Order No. 32929 issued in Case No. IPC-E-13-16, the Commission confirmed that
circumstances at the time required upgrades to meet environmental regulations and to
continue providing reliable energy to customers. Idaho Power then acted in accordance
with the conclusions of its detailed analysis and the issuance of the CPCN by the
Commission with Order No. 32929 by installing SCR controls on Bridger Units 3 and 4.
Idaho Power also filed thirteen Quarterly Reports with the Commission in Case No. IPC-
E-13-16 between March 2013 to March 2017 providing project schedule and cost updates
to ensure that the Commission and other interested parties had visibility into ongoing
environmental policies and regulations driving the project, as well as the project activities
that led to regulatory compliance and the provision of safe, reliable service. Therefore,
Idaho Power’s $58.29 million and $51.65 million investments in SCR controls for Bridger
Units 3 and 4, respectively, were prudently incurred and have been used and useful in
the subsequent years for energy generation, economic sales, and system reliability.

4 ICL/Sierra Joint Comments, pg. 8.
IDAHO POWER COMPANY’S REPLY COMMENTS - 5
B. Idaho Power’s Proposed Bridger Levelized Revenue Requirement
Mechanism Achieves Staff’s Stated Goal of Ensuring Customer Pay No More
or No Less than Actual Costs Associated with Bridger; Staff’s Proposed
Mechanism Does Not.

7. In their Comments, Commission Staff signals support for Idaho Power’s
proposed balancing account to track any differences in the Bridger coal-related revenue
requirements, agreeing that the mechanism will “ensure the Company recovers no more
and no less than the actual costs associated with the closure of Bridger.”5 However,
Commission Staff’s proposal for computing the differences is flawed and does not achieve
their stated goal. In fact, due to certain modifications to the Company’s proposal,
Commission Staff’s recommendation would cause considerable financial harm to Idaho
Power and ultimately its customers.
8. Commission Staff proposes to implement a balancing account mechanism,
but with several key differences that result in financial harm to Idaho Power. First, Staff is
proposing to use 2020 Bridger-related revenue requirement as the basis for comparison
when calculating variances to include in the balancing account, and to accelerate the
depreciable life of Bridger coal-related assets to year-end 2030. However, Staff is
proposing no rate adjustment to align customer rates with these changes, which would
result in the Company calculating a cumulative balancing account amount that is
disconnected from revenue requirement amounts the Company has been authorized to
collect. If Staff’s proposal is approved, Idaho Power would be recording the difference
between a base 2020 revenue requirement – a revenue requirement amount the
Company has not yet been authorized to collect – and a non-levelized declining revenue
requirement annually from 2021 through 2030. Simply put, the resulting effect of applying

5 Staff Comments, p. 11.
IDAHO POWER COMPANY’S REPLY COMMENTS - 6
Staff’s proposed method would be to require the Company to track for future return to
customers, amounts Idaho Power never actually recovered from customers.
Implementing Staff’s proposed modifications would result in an estimated cumulative
negative financial impact to Idaho Power of $95.4 million for the 2021 through 2030 time
period.
9. As explained earlier, following their extensive review of investments made
at Bridger during the January 1, 2012, through December 31, 2020, time period,
Commission Staff concluded the investments were reasonably prudent. Yet, Commission
Staff is recommending the 2020 revenue requirement should be used as the base for the
tracking of revenue requirement differences to be recorded in the balancing account,
negating the ability for the Company to recover the return on, or return of, the investments
Commission Staff has deemed necessary for the continued safe, reliable operation of
Bridger.
10. Commission Staff has previously supported Idaho Power’s glide path away
from coal resources as a method for stabilizing rates for customers as the plants’ end-of-
life neared, recommending approval of the establishment of a levelized revenue
requirement mechanism for the early closure of both the Boardman power plant6 and the
North Valmy power plant, as well as supporting the continued evaluation of Valmy Unit 2
for a potentially earlier exit.7 However, with respect to Bridger, Commission Staff believes
Idaho Power’s revenue collected during 2020 was adequate to cover Bridger revenue
requirement amounts, and therefore should not be recoverable. This recommendation
was based on a review of IdaCorp’s 2021 Annual Report, which indicated Idaho Power

6 Case No. IPC-E-11-18, Staff Comments, dated January 13, 2012.
7 Case No. IPC-E-16-24, Staff Comments, dated May 18, 2017.
IDAHO POWER COMPANY’S REPLY COMMENTS - 7
earned a 9.2 percent return on equity (“ROE”). But, in their analysis, Commission Staff
failed to reflect that the 9.2 percent ROE for which they based their recommendation is
earnings on an actual basis, not a rate case view in which normalizing and rate-making
adjustments are made to actual earnings to more appropriately reflect a normalized level
of earnings. For example, in 2021 Idaho Power set a new peak demand in June and July
as the northwest region experienced a record-setting heat wave, which was listed in the
2021 Annual Report as a driver of increased sales over that time period. Due to these
types of events, using actual earnings as a basis for an earnings test is inappropriate.
11. In addition, Commission Staff incorrectly points to the Company’s
Confidential Response to Staff’s Production Request No. 3 as support for their proposal
indicating it would “have a very small impact” to Idaho Power’s ROE and “… will not
significantly impact the Company’s current financial position.”8 Staff’s Production
Request No. 3 requested a comparison of the impact to Idaho Power’s ROE if recovery
of the Bridger levelized revenue requirement was approved and the ROE if recovery of
the Bridger levelized revenue requirement was not approved. Commission Staff
misapplies the Company’s response to its own modified proposal, failing to note that the
Company’s calculation of the estimated ROE if Idaho Power’s request in this case is not
approved, assumes that the request is not approved in its entirety, and therefore does not
include the impacts associated with the accelerated depreciation of Bridger coal-related
investments, significantly understating the estimated impact to the Company’s financial
position.

8 Staff Comments, p. 11.
IDAHO POWER COMPANY’S REPLY COMMENTS - 8
12. The recommendation by Commission Staff to use the 2020 revenue
requirement as the base for the tracking of revenue requirement differences in the Bridger
balancing account would cause significant financial harm to Idaho Power, resulting in the
immediate need for Idaho Power to file a general rate case. The Company believes there
is an alternative to accomplishing Commission Staff’s objectives without unwarranted
financial harm.
C. The Company Provides Adequate Oversight of Capital Investment Decisions
at Bridger.

13. As a one-third owner in the plant, Idaho Power is actively involved in the
decision-making process related to capital investments at Bridger. As the plant operator,
PacifiCorp analyzes and proposes the need for capital projects necessary to ensure
continued safe, reliable operations of the plant. In accordance with Section 4.2 of the
Agreement for the Operation of the Jim Bridger Project between Idaho Power Company
and Pacific Power & Light Company, as the plant operator, PacifiCorp:
“covenants that it will operate and maintain the Project at the lowest
reasonable cost and in a prudent and skillful manner in accord both with the
standards prevailing in the utility industry for projects of a similar size and
nature and with applicable laws and final orders or regulations of regulatory
or other agencies having jurisdictions. It is recognized that the Operator
must have the latitude necessary to operate and maintain the Project
accordingly.”

14. Although the initial decision making for necessary capital investments at
Bridger is performed by the plant operator, Idaho Power regularly participates in
developing and discussing the capital investment forecast, influencing the investments
ultimately made. The Company’s evaluation begins well in advance of the mid-year
budget review meetings that occur annually. Prior to the budget presentations, Idaho
IDAHO POWER COMPANY’S REPLY COMMENTS - 9
Power personnel met with plant personnel to perform a detailed review of the capital
projects for the upcoming three years, including the scope of the project, need for the
project, and any consequences that would occur if the parties chose not to complete the
project, as evidenced by the workpapers prepared for Commission Staff’s April 20, 2022,
on-site review. During this review, the Company asks questions of specific projects for
clarification and understanding, if needed, allowing time for revisions to the capital
forecast prior to finalizing for the mid-year budget review meeting in which PacifiCorp
presents a detailed 3-year forecast with a high-level 10-year forecast.
15. Next, during each quarterly Ownership Meeting, the entire capital budget
spend-to-date is reviewed and discussed, along with any necessary or proposed
adjustments to the remaining project work. During the September quarterly Ownership
Meetings, the final proposed capital budget is provided. Plant personnel and subject
matter experts on the various capital projects are available during both the mid-year and
September presentations to answer any questions that Idaho Power may have for the
operating partner. The Ownership Meeting Minutes provided for Commission Staff’s on-
site review on April 20, 2022, document the Company’s questioning of various actual and
forecasted expenditures. On a monthly basis, Idaho Power reviews forecasts for capital
and operations and maintenance expense. The Company remains in contact with the
plant via phone calls and multiple yearly on-site visits, where the open dialog of the capital
projects occurs. Idaho Power representatives also visit the Bridger plant, to review and
observe the capital projects in progress.
16. Idaho Power recognizes that a prudence review of investments made at a
jointly-owned power plant spanning nearly a decade, such as the one conducted by Staff
IDAHO POWER COMPANY’S REPLY COMMENTS - 10
in this case, is both a time and data intensive exercise. The Company acknowledges and
appreciates Staff’s extensive review of the capital investment documentation, finding that
the investments made at Bridger since 2011 were prudent. In their comments, Staff
acknowledges the documentation provided by Idaho Power “shows that the Company is
involved in the decision-making process for project need and budget tracking…”.9
However, Idaho Power would like to clarify an issue raised in Staff’s Comments and
emphasize the Company’s involvement regarding capital investments as the partners
diverge on unit exit dates.
17. Staff was critical of Idaho Power’s documentation “showing how it was
involved in these meetings and how its needs differ from the managing partner”10 further
indicating concerns “that the Company’s interest may not be adequately represented
while making investment decisions.”11 It is worth noting that at the time of the initial filing
of the Company’s request in this case, both Idaho Power and PacifiCorp were operating
Bridger under the end-of-life assumptions from each utility’s most recent Integrated
Resource Plan (“IRP”), the Company’s Second Amended 2019 IRP and PacifiCorp’s
2019 IRP. Previously, Idaho Power was operating under an assumed 2034 Bridger end-
of-life. It was the preferred portfolio of Idaho Power’s Second Amended 2019 IRP that
first identified a more favorable economic outcome associated with an earlier end-of-life
of Bridger, and varying exit dates by unit, driving the Company’s request to accelerate the
end-of-life of Bridger in this case. Idaho Power’s preferred portfolio in the Second
Amended 2019 IRP identified early Bridger unit exits in 2022, 2026, 2028, and 2030, while

9 Id., p. 8.
10 Id., p. 8.
11 Id., p. 8.
IDAHO POWER COMPANY’S REPLY COMMENTS - 11
PacifiCorp’s 2019 preferred portfolio identified early Bridger unit exits in 2023 and 2028
but maintained 2037 for the remaining two units. Therefore, it was not until late 2019 that
the Company added to its focus of ensuring only investments for the continued safe,
efficient, and reliable operations of Bridger are made, the complexity of the differing end-
of-life dates for each unit and by each co-owner.
18. As such, Idaho Power agrees with Staff’s assessment that the Company
should “be actively involved in reflecting its differing view of project investment need given
the different exit/retirement dates between the two Companies.”12 However, Idaho Power
believes Staff’s criticism that the Company has “provided little documentation to date
showing how it was involved in these meetings and how its needs differ from the
managing partner”13 is premature because the discussions have just begun. With both
utilities identifying early and different exit dates for the units, Idaho Power committed in
the Action Plan of the Second Amended 2019 IRP to begin discussions with PacifiCorp
about early exits from Bridger units because current contractual terms do not contemplate
one partner ending participation in a unit during the time the other co-owner wishes to
continue operations. Since then, the procedural schedule in the current case was
suspended due to unresolved guidance on environmental compliance of Units 1 and 2
and the completion of PacifiCorp’s 2021 IRP which included an Action Plan envisioning
the cessation of coal-fired generation in Units 1 and 2 in 2023 with a natural gas
conversion of those units in 2024. The economic benefit of ceasing participation in coal-
fired operations of Bridger changed yet again with Idaho Power’s 2021 IRP, also
supporting a natural gas conversion of Units 1 and 2 in 2024 and indicating an exit of

12 Id., p. 8.
13 Id., p. 8.
IDAHO POWER COMPANY’S REPLY COMMENTS - 12
Units 3 and 4 in 2025 and 2028, respectively. The needs of the partners have changed
significantly in only the last 18 months.
19. Therefore, the Company agrees with Commission Staff’s opinion that
governance of the investments made by PacifiCorp as the operating partner, “ensuring
that projects are implemented at least-cost to customers”14 is appropriate. In addition to
involvement in various partner meetings described earlier and in light of the recent
development in the differing exit dates of the Bridger units by each party, as explained in
the Direct Testimony of Matthew T. Larkin, in the quantification of the Bridger levelized
revenue requirement, Idaho Power adjusted the capital forecast. Given that the units will
be approaching their end-of-life, the Company removed large capital expenditures
associated with the overhaul of Units 3 and 4 in 2028 and 2029, respectively, because
the Company believed it was too early to determine if the overhaul will be required. Idaho
Power continually reevaluates the capital forecast and communicates the Company’s
need with the plant, ensuring only those investments necessary for the safe and reliable
operations of each unit are made.
20. Idaho Power would also like to clarify that the Company is contractually
obligated to rely “heavily on its operating partner and co-owner PacifiCorp for project
management, project implementation and project construction.”15 However, Idaho Power
is and always has been actively involved in the decision-making process in all matters
associated with Bridger capital investments as a co-owner. In their comments,
Commission Staff indicated additional oversight is warranted, including more frequent on-
site inspection of capital projects with field reports documenting project activity and

14 Id., p. 8.
15 Id., p. 8.
IDAHO POWER COMPANY’S REPLY COMMENTS - 13
progress. It is important to note that the additional direct oversight and on-site project
management of Bridger investments recommended by Commission Staff would require
the addition of a full-time Idaho Power employee, and Idaho Power believes Staff’s
concerns can be addressed without the additional cost that would likely be required by
this specific proposal. Idaho Power looks forward to working with Commission Staff to
address Commission Staff’s recommendation that the “Company establish a formalized
process to document the circumstances, the Company’s justifications, and the final
decisions made for these types of investment decisions”16. Once aligned on any process
changes, these new practices would be in place for future investments, or those
investments made in late 2022 and beyond, and included as part of the Company’s
request in future prudence filings. Similarly, Idaho Power supports Staff’s
recommendation that the Company “submit reports to the Commission referencing
projected expenditures for Bridger after every Integrated Resource Plan is
acknowledged.”17
D. Securitization of Bridger Levelized Revenue Requirement Amounts Would
Cause Undue Financial Harm.

21. Both ICIP and the joint comments of ICL and Sierra Club suggest Idaho
Power should request authorization from the Commission to issue bonds for recovery of
costs associated with the early exit from coal-fired operations at Bridger, or securitization
to finance Bridger coal-fired assets. Securitization can be a ratemaking alternative to self-
financing by a utility by issuing debt in the form of bonds. Title 61 – Public Utility
Regulation of the Idaho Statutes affords the Commission two options for approving

16 Id., p. 8.
17 Id., p. 11.
IDAHO POWER COMPANY’S REPLY COMMENTS - 14
securitization requests by a utility: (1) Chapter 15 is specific to the issuance of bonds for
recovery of energy costs, and (2) Chapter 16 is somewhat broader allowing for the
issuance of bonds for cost reductions, or Utility Cost Reduction Bonds. Because the
Company’s request in this case is specific to Bridger investments, and not Bridger-related
power supply costs, Chapter 15 is not an option to pursue for potential securitization
approval.
22. As envisioned in the Joint Comments of ICL and Sierra Club, debt
securitization of Bridger coal-related investments would be used to lower the revenue
requirement in this case by eliminating the return component from the revenue
requirement calculation, lowering the overall cost of capital. In practice, however, Idaho
Power believes the benefits of debt securitization would not occur without subsequent
financial harm. Under Idaho’s regulatory mandate and model, the Company has an
obligation to provide adequate, efficient, just, and reasonable service on a
nondiscriminatory basis to all those that request it within its certificated service area.18 As
part of the regulatory compact, the Company must serve all customers in the service area,
in exchange for its exclusive right to provide retail electric service within the service area.
In return, the compact provides Idaho Power the opportunity to earn a reasonable return
by investing capital into the resources and systems necessary to perform its service
obligation.
23. Securitization of prudently incurred capital investments lowers revenue
requirement amounts by effectively not allowing the Company to earn a fair rate of return
on its investment. While the Commission has oversight to ensure the Company is

18 Idaho Code §§ 61-302, 61- 315, 61-507.
IDAHO POWER COMPANY’S REPLY COMMENTS - 15
prudently investing its capital, Idaho Power and its shareowners should not be penalized
after the fact for not seeking to securitize costs associated with Bridger investments solely
with debt. In fact, Chapter 16 of Title 61 – Public Utility Regulation of the Idaho Statutes,
states “[n]o public utility shall be treated as having acted unreasonably or imprudently by
reason of its failure to apply for a cost reduction order . . .”19 Further, Chapter 16 specifies
that the legislative intent of authorization by the Commission of Utility Cost Reduction
Bonds is not intended to take away from the utility model, indicating “this type of securities
legislation is in the public interest but should not be considered as endorsement of, or
intended to provide, a mechanism for restructuring of the utility industry in the state of
Idaho.”20
24. Since rates related to Bridger were last set in the Company’s 2011 General
Rate Case, the Company has invested hundreds of millions of dollars in the plant to
ensure safe, reliable, fair-priced service for its customers. Securitization of these costs
would effectively prevent the Company and its investors from earning a fair rate of return
on prudently-incurred, used and useful investment at the Bridger plant. Applying this
treatment to prudent investment in a used and useful facility would result in financial harm
related to the Company’s ability to attract capital, and undermine the regulatory compact
by contradicting the intent of Chapter 16 and effectively restructuring the utility industry in
the state of Idaho.
25. The incremental costs of debt securitization should be considered as well.
In addition to the interest cost of a securitized debt financing, there would be sizable
transaction costs. The transaction costs for Idaho Power’s regular long-term bond

19 Idaho Code §16-1603(5).
20 Idaho Code §16-1601.
IDAHO POWER COMPANY’S REPLY COMMENTS - 16
financing are estimated to be approximately $1.24 for every $100 financed21 and includes
underwriting commissions, fees to rate the bonds from S&P and Moody’s, legal and other
miscellaneous fees. The legal fees associated with a securitized debt financing would
most likely be higher as the securitization structure adds another level of complexity to
the bond documents. In fact, when developing a proposal for debt securitization for the
Power Cost Adjustment increase stemming from the Western Energy Crisis in 2002,
Idaho Power estimated several million dollars in additional fees associated with the
securitization process.
26. It should also be noted that, consistent with the treatment of Boardman and
Valmy-levelized revenue requirement computations, the Company voluntarily proposed
to use a 9.5 percent ROE, less than the authorized ROE included in base rates, in the
quantification of the Bridger coal-related levelized revenue requirement to reflect the
balancing account methodology that provides for full recovery of the ROE for Bridger.
The Commission ultimately approved22 this reduced return, which was an agreed upon
method applied to both the Boardman and Valmy mechanisms, in recognition of the
establishment of a mechanism that provides the Company with the opportunity to recover
its full costs associated with the Bridger plant.

21 As noted on pgs. 7-8 of the securities application filed May 2, 2022, in Case No. IPC-E-22-14.
22 In the Matter of Idaho Power Company’s Request for Acceptance of Its Regulatory Plan Regarding the
Early Shutdown of the Boardman Power Plant, Case No IPC-E-11-18, Order No. 32457 at 4 (Feb 15,
2012) (“The Commission finds it reasonable to offset the Company’s resulting, reduced recovery risk
with a 9.5% ROE for purposes of calculating the initial, levelized Boardman recovery amount, and to
subsequently adjust the ROE using the ADITC trigger calculation.”); In the Matter of the Application of
Idaho Power Company for Authority to Increase Its Rates for Electric Service to Recover Costs
Associated with the North Valmy Plant, Case No. IPC-E-16-24, Order No. 33771 at 5 (May 31,2017)
(approving Settlement Stipulation where “Staff supported the 9.5% return on equity (ROE) used to
calculate Valmy’s levelized revenue requirement, as it is the same ROE approved in Order No. 32424
(for the Accumulated Deferred investment Tax Credit trigger), and used in the Boardman coal plant
amortization and deferral account.”)
.
IDAHO POWER COMPANY’S REPLY COMMENTS - 17

E. The Application of the Carrying Charge in the Balancing Account is
Necessary with a Levelized Revenue Requirement Mechanism.

27. Idaho Power’s request in this case is to implement a levelized revenue
requirement mechanism that would allow for recovery of Bridger coal-related investments
through 2030 for ratemaking purposes, though the Company’s exit from coal-fired
operations of each unit varies, occurring at different years throughout that time period.
Because GAAP and Internal Revenue Code rules will require Idaho Power to make
income tax filings and accounting entries consistent with the economics that actually
occur rather than the 2030 assumption the proposed revenue requirement is based on,
regulatory accounts are required to adjust the financial statement impacts resulting from
the timing differences between GAAP results and the 2030 ratemaking assumption.
28. Commission Staff agrees that a balancing account approach is appropriate
for tracking differences in the Bridger coal-related revenue requirements, but suggests
“the balance in the deferral, both positive and negative, should not be subject to any
carrying charges or return.”23 However, the application of a carrying charge on the
balancing account is necessary to accurately reflect the time value of money associated
with the difference in a ratemaking assumption that differs from the economic life of the
unit. The request for approval of a carrying charge on the balancing account is not a
request for recovery of amounts above those authorized under a more traditional
ratemaking approach but rather a reflection of the timing differences between the two.
Based on this understanding, the Company believes that Staff’s discussion of a carrying
charge may be directed at deferral balances that may accrue as differences that exist

23 Staff Comments, p.10.
IDAHO POWER COMPANY’S REPLY COMMENTS - 18
between the annual levelized revenue requirement and annual revenue collected as
tracked under the balancing account mechanism. The Company is not opposed to the
absence of a carrying charge for such amounts.
F. Idaho Power’s Customer Communications Met the Commission’s
Requirements.

29. In their initial comments, CEO states the notice Idaho Power provided to
customers regarding the Company’s proposed change in rates “misleads through material
omissions.”24 CEO claims the notice is deficient because it does not specifically identify
the SCR controls as investments included in Idaho Power’s proposed accelerated
recovery of depreciation expense. Rule 125 of the Rules of Procedure (“RP”) of the Idaho
Administrative Code identifies the requirements of customer notices when a change in
rates is proposed. RP 125(01)(a) states that when “… a utility requests a rate increase,
the customer notice must briefly explain the utility’s need for additional revenue and the
dollar amount requested . . . [Emphasis added]”.
30. Both the news release sent to media outlets and the bill stuffer sent to all
customers included a brief description of the driver of the Company’s need for additional
revenue, as required by RP 125: the change in the economic life of Bridger and the
resulting request for accelerated recovery of depreciation expense by year-end 2030.
CEO contends the notices should have identified two specific investments made by Idaho
Power, the SCR controls installed on Units 3 and 4.
31. Idaho Power’s request in this case includes the revenue requirement
associated with all Bridger coal-related investments as of December 31, 2020, including
coal-related investments made since the last general rate case, which comprises 841

24 CEO Comments, p.3.
IDAHO POWER COMPANY’S REPLY COMMENTS - 19
different completed projects. While the depreciation expense associated with these
projects is a component of the need for a rate increase, a news release and bill stuffer
that contains the level of detail suggested by CEO is not practical. Even if it were,
because most customers do not have reason to know what “selective catalytic reduction”
investments are or entail, such detail would not have made a practical difference. Rather,
the Company provided a brief explanation of the need for additional revenue, as required
by RP 125, and described that customers have the opportunity to review Idaho Power’s
proposal and how they can participate in that review. Further, as part of the Company’s
request in this case, the Direct Testimony of Ryan N. Adelman devotes a section
specifically to the investments made at Bridger since 2011, with an exhibit detailing all
841 projects and 11 pages of discussion concerning the investments necessary for
environmental compliance, including the SCR control investments.
32. Idaho Power adequately informed customers of the proposed rate increase,
included a brief explanation of the driver of the need for additional revenue, and advised
customers the proposal was open for public review and how one may participate in the
review of the request, as required by RP 125. The Commission’s Notice of Application
and Amended Notice of Application also provided notice to customers of the plant
investments made to ensure environmental compliance and routine maintenance and
repair.25
III. CONCLUSION
33. Idaho Power appreciates the opportunity to respond to Comments filed in
this case, for Staff’s review of the voluminous amount of documentation of Bridger-related

25 Order Nos. 35088 and 35340.
IDAHO POWER COMPANY’S REPLY COMMENTS - 20
costs, and its support for a prudence determination of the investments. The Company
respectfully requests the Commission (1) accept Commission Staff’s recommendation to
find all Bridger capital investments through 2020 as prudent, (2) reject Commission Staff’s
proposal to use the 2020 revenue requirement as the base for the tracking of revenue
requirement differences in the Bridger balancing account, and (3) reject ICIP, ICL and
Sierra Club’s recommendation that Idaho Power should request authorization from the
Commission for securitization of Bridger coal-fired investments.
DATED at Boise, Idaho, this 13th day of May, 2022.

_____________________for___________
LISA D. NORDSTROM
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S REPLY COMMENTS - 21
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 13th day of May 2022, I served a true and correct
copy of Idaho Power Company’s Reply Comments upon the following named parties by
the method indicated below, and addressed to the following:

Commission Staff
Chris Burdin
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8,
Suite 201-A (83714)
PO Box 83720
Boise, ID 83720-0074

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Industrial Customer of Idaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
Boise, Idaho 83707

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Dr. Don Reading
6070 Hill Road
Boise, Idaho 83703
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Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 N. 6th Street
Boise, Idaho 83701
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City of Boise
Ed Jewell
150 N. Capitol Blvd.
P.O. Box 500
Boise, Idaho 83701-0500

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IDAHO POWER COMPANY’S REPLY COMMENTS - 22
Clean Energy Opportunities for Idaho, Inc.
Kelsey Jae
Law for Conscious Leadership
920 N. Clover Dr.,
Boise, Idaho 83703
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Michael Heckler
Courtney White
Clean Energy Opportunities for Idaho
3778 Plantation River Drive, Suite 102
Boise, ID 83703

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Sierra Club
Rose Monahan
Ana Boyd
2101 Webster Street, Suite 1300
Oakland, CA 94612
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Micron Technology, Inc.
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart LLP
555 17th Street, Suite 3200
Denver, CO 80202
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Micron Technology, Inc.
Jim Swier
8000 S. Federal Way
Boise, ID 83707
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________________________________
Stacy Gust, Regulatory Administrative
Assistant