HomeMy WebLinkAbout20220310Notice_of_Amended_Application_Order_No_35340.pdfNOTICE OF AMENDED APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35340 1
Office of the Secretary
Service Date
March 10, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
On June 3, 2021, Idaho Power Company (“Company”) applied to the Commission for
authorization to accelerate the depreciation schedule for the Jim Bridger Power Plant (“Bridger”)
to allow the plant to be fully depreciated and recovered by December 31, 2030. Application at 1.
Clean Energy Opportunities for Idaho, City of Boise City, Industrial Customers of
Idaho Power, Idaho Conservation League, Micron Technology, and Sierra Club intervened in this
matter. Order Nos. 35094, 35102, and 35119.
On November 17, 2021, the Commission suspended the procedural schedule and
discovery until the Company files an update or requests to set the procedural schedule once more
information is known, but no later than December 31, 2021. Order No. 35222. The Commission
also suspended the effective date for 30 days and 5 months, or until May 31, 2022, unless the
Commission issues an earlier order accepting, rejecting, or modifying the Company’s Application.
Id.
On December 30, 2021, the Company filed a letter (“Update”) with the Commission
stating that it filed its 2021 Integrated Resource Plan (“IRP”) with a preferred portfolio that also
identifies the cessation of coal-fired generation in Bridger Units 1 and 2 in 2023 with a natural gas
conversion of those units in 2024. Update at 1. The Company also stated that the Environmental
Protection Agency (“EPA”) has not yet formally acted on PacifiCorp’s proposed alternative
regional haze compliance plan for Bridger Units 1 and 2. Id. at 2. The plan would require emission
controls by December 31, 2021, for Unit 2 and December 31, 2022, for Unit 1. Id. The Company
stated that on December 27, 2021, Wyoming Governor Mark Gordon issued a temporary
emergency suspension extending the compliance date of Unit 2 through April 30, 2022, to give
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
NOTICE OF AMENDED
APPLICATION
NOTICE OF MODIFIED
PROCEDURE
ORDER NO. 35340
NOTICE OF AMENDED APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35340 2
more time for the EPA to act on the Wyoming State Implementation Plan (“SIP”). Id. The EPA is
in discussions with PacifiCorp regarding this issue. Id.
On February 7, 2022, the Company met with the parties and discussed filing an
amended application and a proposed schedule to resume processing this case. Amended
Application at 3. On February 16, 2022, the Company filed an amended Application and requested
the Commission issue an order authorizing the Company to (1) accelerate the 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 the Company’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: an overall increase of 2.12
percent. Id. at 1. The Company requested that its proposed rates take effect June 1, 2022. Id.
The Company also requested that the Commission set a public comment deadline of
April 29, 2022, a simultaneous reply comment deadline of May 13, 2022, and a Company reply
deadline of May 18, 2022. Id. at 11.
The Commission now grants the Company’s motion to recommence proceedings and
provides the following Notice of Amended Application and Notice of Modified Procedure.
NOTICE OF AMENDED APPLICATION
YOU ARE HEREBY NOTIFIED that the Company’s amended quantification of the
Bridger levelized revenue requirement includes only coal-related assets and removes from the
original request all investments that would remain in service for natural gas operations and
associated natural gas related costs in accordance with the planned natural gas conversion of
Bridger Units 1 and 2 as presented in the Company’s 2021 IRP.1 Id. at 3.
YOU ARE FURTHER NOTIFIED that the Bridger plant is located near Rock Springs,
Wyoming and consists of four generating units. Id. PacifiCorp owns two-thirds of the facility and
is its operator, while the Company owns the other one-third. Id. The Company and PacifiCorp
(“Co-Owners”) work jointly to make decisions regarding Bridger—including required investments
and the proposed retirement of Bridger. Id. Bridger is connected to the Borah West transmission
path west of the Borah Substation near American Falls, Idaho. Id. The Company’s one-third share
1 The Company’s IRP is available for review in Case No. IPC-E-21-43.
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ORDER NO. 35340 3
of energy flows west over this path. Id. The Idaho-Wyoming path (“Bridger West”) consists of
three 345 kV transmission lines. Id. at 4. The Company owns 800 MW of the 2,400 MW east-to-
west capacity which feeds into the Borah West path when power is moving east to west from
Bridger. Id.
YOU ARE FURTHER NOTIFIED that the Company has made numerous investments
to ensure environmental compliance and routine maintenance and repair. Id. The Company
requested a prudence determination on incremental Bridger coal-related investments since the
January 1, 2012, through December 31, 2020, time-period.2 Id. The Company represented that its
investments for environmental compliance make up nearly 50 percent of the total Bridger
investments made since January 1, 2012. Id. at 5. The Company also represented it funded 15
investments greater than $1 million for operational maintenance costs. See Id.
YOU ARE FURTHER NOTIFIED that the Company represented that changing
conditions have resulted in earlier than expected exit from participation in Bridger operations. Id.
The Company’s 2019 IRP acknowledged Bridger exits in 2022, 2026, 2028, and 2030.3 Id. at 5-6.
The Company’s 2021 IRP (Case No. IPC-E-21-43) included the conversion of Bridger Units 1 and
2 from coal to natural gas by the summer of 2024 with a 2034 exit date, and the exit of coal-fired
operations in Units 3 and 4 by year-end 2025 and 2028. Id. at 6. The Company believes that the
2021 IRP indicates that an earlier exit from coal-fired generation at Bridger would be more
economical. Id. The Company stated that a depreciable life of year-end 2030 for all Bridger Units
is appropriate “as it [would] help minimize revenue requirement impacts to customers.” Id. The
Company estimated that it would exit coal-fired operations of Bridger completely by 2028. Id.
YOU ARE FURTHER NOTIFIED that the Company estimated that Bridger would
require incremental coal-related investments to maintain operations prior to the decommissioning
of the facility. Id. However, because the specific timing and exact amounts of future investments
are unknown, the Company proposed that the Commission establish a balancing account to allow
flexibility for the recovery of the remaining Bridger investment revenue requirement. Id. at 6-7.
The Company stated that under the balancing account approach,
the Company replaces the base rate revenue recovery associated with [the
Company’s] existing coal-related investment in Bridger with a levelized revenue
2 See Case No. IPC-E-11-08.
3 See Case No. IPC-E-19-19.
NOTICE OF AMENDED APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35340 4
requirement and tracks it in the Bridger balancing account, smoothing revenue
requirement impacts associated with the exit of Bridger coal-fired operations and
allowing for full recovery of Bridger coal-related costs near the time [the Company]
ceases participation in coal-fired operations.
Id. at 7. The Company represented that this approach aligns the cost recovery period with the
Company’s remaining participation in coal-fired operations more closely and ensures that
Customers would “pay no more or no less than the actual coal-related O&M and capital coal-
related costs of the Bridger plant beginning June 1, 2022.” Id. The Company further believed that
the balancing account approach would accelerate depreciation expenses related to its Bridger-
related investments. Id. The Company proposed that the Commission track the coal-related
investment return and associated depreciation expenses, as well as the decommissioning costs,
through the balancing account. Id.
YOU ARE FURTHER NOTIFIED that the Company requested an accounting order
that allows the Company to make necessary accounting entries, including a regulatory asset
account that would match Generally Accepted Accounting Principles (“GAAP”) revenue
recognition with actual monthly patterns of coal-related revenue requirement. Id. at 8. The
Company stated that regulatory accounts would be required to adjust the financial statement
impacts resulting from Bridger-related GAAP accounting and income tax results. Id.
YOU ARE FURTHER NOTIFIED that the Company requested recovery of coal-
related levelized revenue requirement that includes costs of accelerating the depreciation of
Bridger, the return associated with coal-related capital investments net of accumulated
depreciation forecasted through the Company’s participation in Bridger, interim decommissioning
costs associated with Bridger, and O&M savings associated with non-fuel coal-related O&M
reductions. Id. These costs amount to $27,127,333. The following table presents the differences
between each component as quantified in the Company’s initial request and the amounts that
reflect Bridger’s investment levelized revenue requirement:
NOTICE OF AMENDED APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35340 5
YOU ARE FURTHER NOTIFIED that the Company proposed to allocate the increase
related to Bridger’s balancing account using the jurisdictional separating study method. Id. at 9.
The Company requested that the incremental revenue requirement increase of $27.13 million be
recovered from all customer classes through a uniform percentage increase to all base rate
components except the service charge. Id.
YOU ARE FURTHER NOTIFIED that the Company represented that it would submit
to the Commission its annual adjustment mechanism filings, the Fixed Cost Adjustment (“FCA”)
and Power Cost Adjustment (“PCA”) on March 15, 2022, and April 15, 2022, respectively. In the
Company’s FCA filing, it will request the incremental revenue requirement of approximately
$27.13 million; the Company stated that it would include a set of proposed tariff sheets specifying
the proposed rates in its filing. Id. at 9-10.
YOU ARE FURTHER NOTIFIED that the Amended Application is available for
public inspection during regular business hours at the Commission’s office. These documents are
also available on the Commission’s web site at www.puc.idaho.gov. Click on the “ELECTRIC”
icon, select “Open Cases,” and click on the case number as shown on the front of this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter, and that it will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Commission's Rules of Procedure, IDAPA
June 2021
Request
February 2022
Amended Request
% Change
Plant Investment $73,470,945 $52,121,340 (29.1)
Interim Decomm. Costs $59,318 $64,449 8.6
O&M Savings ($5,736,719) ($4,391,349) (23.5)
Levelized Rev. Req. $67,793,544 $47,794,440 (29.5)
Rev. Req. in Rates ($36,96,815) ($20,667,107) (44.1)
Net Change $30,825,729 $27,127,333 (12.0)
NOTICE OF AMENDED APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35340 6
31.01.01.201 through .204. The Commission notes that Modified Procedure and written comments
have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that persons desiring to state a position on this
Application may file a written comment explaining why the person supports or opposes the
Application. Persons desiring a hearing must specifically request a hearing in their written
comments. Persons must file written comments by April 27, 2022. Persons who choose to file
comments on or before April 27, 2022, and desire to further comment must reply to all party
comments by May 13, 2022. Comments must be filed through the Commission’s website or by
e-mail unless computer access is unavailable. To comment electronically, please access the
Commission’s home page at www.puc.idaho.gov. Click the “Case Comment Form” and complete
the form using the case number as it appears on the front of this document. To file by e-mail, the
customer must e-mail the comments to the Commission Secretary and the Company at the e-mail
addresses listed below. If computer access is unavailable, then comments may be mailed to the
Commission and Company at these addresses:
For the Idaho Public Utilities
Commission:
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
secretary@puc.idaho.gov
Street Address for Express Mail:
11331 W. Chinden Blvd.
Building 8, Suite 201-A
Boise, ID 83714
For Idaho Power Company:
Matt Larkin
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, ID 83707
mlarkin@idahopower.com
Lisa D. Nordstrom
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, ID 83707
lnordstrom@idahopower.com
dockets@idahopower.com
YOU ARE FURTHER NOTIFIED that the Company must file any reply comments by
May 18, 2022.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set, the Commission will consider this matter on its merits and enter its order
NOTICE OF AMENDED APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35340 7
without a formal hearing. If written comments are received within the time limit set, the
Commission will consider them and, in its discretion, may set the same for formal hearing.
O R D E R
IT IS HEREBY ORDERED that the Company’s Amended Application be processed
by Modified Procedure, Rules 201-204 (IDAPA 31.01.01.201-.204). Persons interested in
submitting written comments must do so by April 27, 2022, and those same Persons must submit
any reply-comments by May 13, 2022. The Company must file final reply comments by May 18,
2022.
IT IS FURTHER ORDERED that the parties should continue to comply with Order
No. 35058, issued June 3, 2021. All pleadings should be filed with the Commission electronically
and shall be deemed timely filed when received by the Commission Secretary. See Rule 14.02.
Service between parties should also be accomplished electronically. Voluminous discovery-related
documents may be filed and served on CD-ROM or a USB flash drive.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 10th day
of March 2022.
ERIC ANDERSON, PRESIDENT
JOHN CHATBURN, COMMISSIONER
JOHN R. HAMMOND JR, COMMISSIONER
ATTEST:
Jan Noriyuki
Commission Secretary
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