20220628Final_Order_No_35452.pdf

ORDER NO. 35452 1
Office of the Secretary
Service Date
June 28, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S PETITION FOR APPROVAL
OF A CUSTOMER SURCHARGE AND
MODIFIED LINE ROUTE
CONFIGURATION FOR CONSTRUCTION
OF A NEW 138 kV TRANSMISSION LINE IN
THE WOOD RIVER VALLEY
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CASE NO. IPC-E-21-25

ORDER NO. 35452

On August 6, 2021, Idaho Power Company (“Company”) petitioned (“Petition”) the
Commission for an order: 1) approving a proposed surcharge for the Company’s customers in
Blaine County to pay for additional undergrounding of a previously approved transmission line;
2) approving the modifications to the line route previously approved in the Certificate of Public
Convenience and Necessity (“CPCN”) granted to the Company in Order No. 33872; and 3) finding
that the Commission’s findings and directives in Order No. 33872—and this Order—have express
authority over any other conflicting agency or local government action or order pursuant to Idaho
Code § 67-6528. The Company asserted that without the new transmission line a long power
outage on the existing transmission line could have significant impact on the northern portion of
Blaine County. The Company also asserted the new transmission line would allow it to de-energize
the existing transmission line (“Existing Transmission Line”) to make necessary repairs and
upgrades to that line safely and efficiently.
In support of the Petition, the Company filed the direct testimony of Ryan N. Adelman,
Vice President of Power Supply, to describe the local permitting activities with Blaine County as
well as the proposed line route and configuration. The Company also filed the direct testimony of
Timothy E. Tatum, Vice President of Regulatory Affairs, to describe the proposed surcharge
amounts and calculation methodology. The Company requested that the Commission process its
Petition by Modified Procedure.
On October 12, 2021, the Commission issued Notice of the Company’s Petition and
Notice of Intervention Deadline. Order No. 35194. The Blaine County Board of County
Commissioners (the “County Board”), Kiki Leslie A. Tidwell (“Tidwell”), pro se, and Cox
Communications (“Cox”) were granted intervention into this case. Order Nos. 35154 and 35225.
ORDER NO. 35452 2
On November 30, 2021, the Commission issued Notice of Modified Procedure and set
a December 21, 2021, public comment deadline, and a January 11, 2022, Company reply comment
deadline. Order No. 35244. Commission Staff (“Staff”), Cox, and Tidwell each submitted
comments.1 The Company filed reply comments. The Commission also received 61 public
comments.
With this Order, we approve the Company’s Petition.
PRIOR PROCEEDINGS AND BACKGROUND
The Company states, the north portion of Blaine County (“North County” or “North
Valley”), including the cities of Ketchum and Sun Valley, is served by a single power source, the
Company’s Wood River-Elkhorn-Ketchum 138 kilovolt (“kV”) transmission line (Existing
Transmission Line). The Company first obtained a CPCN in 1974 to build a redundant 138 kV
transmission line (“Transmission Line”) beginning just north of the city of Hailey at the Wood
River Substation and running approximately 11-13 miles north to a termination point at the
Ketchum Substation in North Blaine County (“North Valley” or “North County”). Petition at fn.
1. The Company stated that this CPCN was “canceled in 1995 in part because of public opposition,
as well as inability to identify an acceptable route and inability of the local jurisdiction to fund
undergrounding.” Id.
On April 23, 2014, at the culmination of a seven-year collaborative process between
the Company and various stakeholder groups, and prior to obtaining a CPCN, the Company filed
for a Conditional Use Permit (“CUP”) with the Blaine County Planning and Zoning Commission
(“P&Z”) to build the Transmission Line. Id. at 8. P&Z denied the CUP application and the County
Board affirmed P&Z’s denial. Id. at 9.
On September 15, 2017, the Commission granted the Company a CPCN (“2017
CPCN”) to build the Transmission Line to the North Valley “as requested in the Company’s
Application.”2 Id. at 4 and 10 citing Order No. 33872 at 1. Specifically, as the Company noted, the
Commission approved “the Company’s requested route of overhead transmission from the Wood
River substation to the transition point near Elkhorn Road, then underground transmission [from
Elkhorn Road] to the Ketchum substation . . . .” (“2017 CPCN Route” or “CPCN Route”). Id. at 5

1 Tidwell filed two sets of comments, one on December 16, 2021, and the other on January 14, 2022.
2 Order No. 33872 also approved the installation of overhead distribution lines from the Wood River Substation to the
city of Ketchum. See Order No. 33872 at 5, 15-16.
ORDER NO. 35452 3
(citing Order No. 33872 at 15).3 In its order granting the 2017 CPCN, the Commission stated it
appreciated:
the considerable time and expense that the parties and participants, including local
governments, organizations, and citizens, dedicated to providing testimony and
comments. The submissions were very well informed and thoughtful and have
greatly aided our understanding of the issues in this case. Likewise, we appreciate
the Company’s efforts to involve the communities in its decision-making processes
and to keep the communities informed through the CAC [Community Advisory
Committee] processes. We believe those processes were successful, as
demonstrated by the high-level of public involvement in this case. We encourage
all interested parties to continue to work together on these issues, as there may still
be opportunities to find areas of common interest and common ground,
notwithstanding the outcome of this proceeding.

Id. at 5 (citing Order No. 33872 at 5). On November 20, 2017, the Company filed a new CUP
application with the P&Z to construct the Transmission Line along the route as authorized by the
Commission in Order No. 33872. Petition at 11. The Company represented that it worked with the
P&Z on: (1) any desired “micro-siting” adjustments for the overhead Transmission Line within
the CPCN Route, and (2) on any additional burials of the Transmission Line within the CPCN
Route, Blaine County would fund. Id. The Company stated the P&Z approved the CUP application
for the Transmission Line on January 15, 2019. Id. at 12. The Company noted the P&Z did not
approve a route for the Transmission Line but provided seven undergrounding options for the
Transmission Line and existing distribution lines for the County Board to consider and select from.
Id.
On June 4, 2019, the County Board granted the Company a CUP (“2019 CUP”) with
the condition that “the entire [T]ransmission [L]ine be undergrounded from the Wood River
Substation north to the City of Ketchum.” Id. at 12-13. The Company explained that the County
Board recognized that obtaining funding to underground the entire line would be difficult, and
qualified its grant by stating that discussions regarding funding “should be fully exhausted before
any consideration of an overhead transmission line in this area . . . [and that] . . . further
consideration and deliberation may be necessary to ‘continue to work together on these issues, as
there may still be opportunities to find areas of common interest and common ground.’” Id. at 13.

3 The Company stated that there would be no incremental cost attributable to local jurisdictions for the 2017 CPCN
route. In the Matter of the Continuation of Idaho Power Company’s Application for a Certificate of Public
Convenience and Necessity to Construct System Improvements to Secure Adequate and Reliable Service to Customers
in the Wood River Valley, Case No. IPC-E-16-28, Application at 4, 23 (Nov 8, 2016).
ORDER NO. 35452 4
The Company explained that to fund the entire undergrounding, the County Board
considered various levy override processes, bonding, and a local improvement district but none
were considered feasible. Id. at 13-14. Consequently, the County Board held three public
stakeholder meetings in September 2020 to consider alternative burial options for the Transmission
Line. Id. at 14; Adelman Direct at 11. The Company participated in each meeting and provided
engineering and financial data. Id. The Company stated that, after the public meetings, the County
Board expressed interest in a partial undergrounding option that contemplated burying the
Transmission Line an additional 1.1 miles south from the Elkhorn substation and burying the
distribution line along the length of the entire route, from the Wood River Substation to the
Ketchum Substation—an option which the Company estimated would cost approximately $8.4
million. Id. at 15.
The Company stated that the County Board requested the Company “consider assessing
a new surcharge on all power bills within Blaine County, separate from existing franchise fee
assessments, to provide funding for the . . . partial underground option.” Id. The Company
considered a three percent franchise fee from Blaine County cities as well as a potential three
percent billing surcharge within unincorporated Blaine County to pay for the undergrounding. Id.
The County Board explained it would be difficult for Blaine County cities to divert their
established franchise fees for the Transmission Line burial. Id. Accordingly, the County Board
requested the Company consider assessing a new surcharge on all power bills within Blaine
County, separate from existing franchise fee assessments to pay the $8.4 million undergrounding
option. Id.
The Company stated it would agree to a maximum surcharge of three percent on a
monthly flat fee basis, subject to Commission approval, if the County Board requested it. Id. at 15-
16. Using 2019 revenues as a baseline, the Company determined a three percent surcharge would
fund approximately $9.1 million of upfront burial costs and financing costs after 20 years. Id. at
15. During the fall of 2020, the County Board held stakeholder meetings to solicit public input on
the proposed solution. County Board Petition to Intervene at 8. The Company stated that the results
of a November 2020 non-scientific public survey of Blaine County residents conducted by the
County Board “showed support for the $8.4 million undergrounding proposal funded by estimated
fixed monthly charges, with 57 percent of respondents strongly supporting or somewhat supporting
ORDER NO. 35452 5
this option, compared with 31 percent strongly opposing or somewhat opposing the option.”
Petition at 16.
After further analysis, the Company advised the County Board that it would be able to
extend the Transmission Line burial an additional 1.4 miles south from Elkhorn Road to a point
near Owl Rock Road and bury the distribution line the entire length of the route under the same
estimated fixed surcharge assessment per customer over an approximately 20-year period (“Owl
Rock Road Route”). Id. at 7. The Company estimated the total incremental cost of the Owl Rock
Road Route to be $9.8 million, based on a $5.7 million distribution line burial estimate, and a $4.1
million Transmission Line burial estimate. Id.
The Company represented that it filed an application with the County Board on
December 22, 2020, for a CUP approving the Owl Rock Road Route. Id. at 17. After the conclusion
of two public hearings, the County Board approved the CUP application and issued its Findings
of Fact, Conclusions of Law, and Decision on March 15, 2021 (“Final CUP” or “2021 CUP”). Id.
The Company stated that, “[u]nder the Final CUP, the County Board modified the ‘all
underground’ condition for the Transmission Line included in the County Board’s initial June 4,
2019, CUP grant, replacing that condition with the partial underground condition set forth in the
Final CUP for the Owl Rock Road Route.”4 Id.
THE PETITION
The Company seeks Commission approval of the Owl Rock Road Route5 and authority
to implement a surcharge assessment in Blaine County to pay for the incremental undergrounding
and financing costs associated with this route. Id. The Company noted that, as compared to the
2017 CPCN Route, the proposed Owl Rock Road Route would cost (1) an additional $5.7 million
to underground the eight miles of existing distribution line along the Transmission Line route; and
(2) an additional $4.1 million to underground the additional 1.4 miles of the Transmission Line
south of Elkhorn Road. Id. at 19. Thus, the Company clarified that the surcharge was intended to
fully recover an estimated $9.8 million in incremental costs for the additional undergrounding for
the Owl Rock Road Route, including interest at the Company’s authorized rate of return over a
20-year collection period. Id. The Company requested the surcharge “become effective on the first
4 A copy of the Final CUP is attached to Adelman’s Direct Testimony, Exhibit No. 2. Petition at 17.
5 The proposed Owl Rock Road Route is attached to Adelman’s Direct Testimony, Exhibit No. 3.
ORDER NO. 35452 6
bill date of the month following energization of the facilities (i.e., when the Transmission Line
[and distribution lines] become[] ‘used and useful’).” Id. at 20.
The Company stated that, after it completed the Transmission Line, “it [would] review
the actual total project construction cost for the Owl Rock Road Route as compared to the
estimated cost of the [2017] CPCN Route (the incremental cost) . . . .” Id. The Company further
stated it would update the surcharge amounts and seek Commission approval if the surcharge rates
needed to be modified. Id.
The Company clarified that “[t]he actual incremental cost [would] represent the
‘principal amount’ to be repaid through the surcharge assessments.” Id. at 23. The Company
further mentioned that “Blaine County [would] have the option to prepay all or part of the
outstanding surcharge principal amount at any time.” Id. The Company explained that in “the case
of partial prepayments, the monthly surcharge assessments [would] remain the same, but the
allocation between principal and interest of the surcharge payments [would] be adjusted to reflect
Blaine County’s principal prepayment, with a corresponding reduction in the number of surcharge
payments remaining under the repayment schedule.” Id.
The Company determined that a fixed monthly charge for each customer-by-customer
class would be reasonable, easy to understand, predictable, and transparent. Id. at 23-24. The
Company divided the customer classes into two categories: (1) Residential and Small General
Service (“Residential”), and (2) Non-Residential (including large commercial, industrial, and
irrigation) (“Non-Residential”). Id. at 24. The Company stated that the estimated surcharge for
average customers in the Residential category was approximately $3.42 per month, and $14.36 per
month for average customers in the Non-Residential category. Id.
The Company stated that it proposed a new tariff Schedule 96 which provided the
estimated surcharge for each customer and that it created a postcard to distribute to all the
customers in Blaine County who would be impacted by the surcharge. Id. at 24. The customer
postcard notice, mailed on August 19, 2021, provided a brief explanation describing the purpose
of the proposed surcharge and referenced the opportunity for public comment on the Company's
Petition. The Company included the postcard as Attachment 3 to the Petition. Id.
The Company further requested an accounting order authorizing it:
to depreciate the incremental capital costs over the 20-year surcharge period
and match the annual depreciation expense with the actual annual principal
payment of the incremental capital so that the incremental costs are fully
ORDER NO. 35452 7
depreciated over the same time period as the surcharge is collected and ensuring
that [its] broader retail customer base is held harmless from a revenue
requirement perspective.

Id. at 25. Noting the estimated 20-year surcharge period, the Company stated that “Generally
Accepted Accounting Principles require [incremental capital costs] to be depreciated over the lives
of the related assets, which, in the Company’s current approved depreciation rates, average more
than 50 years.” Id. Thus, the Company stated without an accounting order there would be
disjunction between the timing of surcharge revenues and the related depreciation expenses. Id.
The Company submitted that accounting for the incremental capital costs would
comply with all Federal Energy Regulatory Commission (“FERC”) regulations, and that it
performed all calculations to ensure that the surcharge revenue fully covered the incremental cost.
Id. at 25-26.
The Company noted that, pursuant to statute, the Commission has the ultimate authority
for determining whether the public interest, convenience, and necessity requires the construction
of certain facilities. Id. The Company cited to Idaho Code § 67-6528 for the proposition that “land
use actions or orders of other government agencies or local governments that are in conflict with
an order of the Commission are null and void.” Id.
The Company mentioned that after the Commission granted the 2017 CPCN, some
parties averred that the Commission’s CPCN had no authority over conflicting local land use
decisions because the order granting the CPCN lacked any specific reference or findings to the
same. Id. at 27. While the Company disagreed with that contention, it requested the Commission:
make specific findings in its Order in this matter that its directives to [the
Company] pursuant to the CPCN, and pursuant to the requests in this Petition,
to construct a second 138 kV transmission line as being necessary and in the
public interest in order to provide adequate and reliable electric service to the
North Valley and to promote public health, safety and convenience, carries
with it the express authority over any action or order of other government
agencies or local governments that are in conflict with such orders of the
Commission pursuant to Idaho Code § 67-6528.
Id. at 27.
STAFF COMMENTS
Staff reviewed the Company’s Petition, the filed testimony and exhibits, the
Company’s proposed surcharge and tariff schedule for Blaine County customers, and the
Company’s responses to Production Requests. Staff believed the surcharge proposal was “the least
ORDER NO. 35452 8
consequential impact on the general body of rate payers,” and recommended Commission
approval. Staff Comments at 3.
1. Line Modifications
Staff noted that the Final CUP from the County Board modified the “all underground”
requirement of the 2019 CUP. Id. at 4.
Staff believed the current cost estimates for the 2017 CPCN Route and the Owl Rock
Road Route were acceptable for purposes of determining the proposed surcharge rates. Id. at 4.
However, because the difference between the actual construction cost of the Owl Rock Road Route
and the final construction cost estimate for the 2017 CPCN Route would determine the amount
recovered through the surcharge to pay for the incremental undergrounding of the Transmission
Line, Staff “recommended that the Company submit the final estimate for the [Owl Rock Road]
Route and the final project cost to the Commission no more than 6 months after the project has
been completed.” Id. Staff stated this would allow the Commission to determine the operational
prudence of the project and whether the surcharge rate needed to be adjusted. Id.
Staff noted that, because the Company planned to continue the surcharge until the
incremental cost—including financing costs—of the Owl Rock Road Route was recovered, the
accuracy of the current cost estimates for determining the rates was not critical to calculating the
initial surcharge rate. Id. at 5. Staff noted that the Company’s most recent cost estimates—
completed in August 2019—for the CPCN Route and the Owl Rock Road Route were reasonable.
Staff reiterated that vetting the accuracy of the estimated and actual construction costs
soon after project completion would “ensure that only prudently incurred construction costs are
included for recovery and that these costs are only recovered from Blaine County customers.” Id.
a. Ratepayer Impact of Incremental Costs not Included in Surcharge
Staff believed the general body of ratepayers would indirectly pay for some incremental
costs associated with the additional undergrounding not accounted for in the surcharge. Id. at 5.
Staff noted there were:
two sets of cost not included in the surcharge: (1) the incremental lifecycle cost
associated with the shorter useful life of underground transmission lines
replacing the section of overhead transmission lines in the CPCN route; and (2)
higher operation and maintenance (“O&M”) costs for underground lines
compared to overhead lines.

ORDER NO. 35452 9
Id. That said, Staff’s analysis indicated that these costs would have a small impact on a per
customer basis outside of Blaine County and would be difficult to accurately estimate. Id. For these
reasons, Staff did not recommend any adjustments in this case. Id. However, Staff recommended
that in future cases where undergrounding is requested, and depending on the facts of the particular
case, the costs associated with higher operation and maintenance requirements and a shorter useful
life of the transmission lines should be considered and, if significant, “included for recovery from
municipalities or counties prior to negotiating alternative recovery mechanisms.” Id. at 7.
2. The Final CUP
Staff noted that there were two specific conditions in the Final CUP referencing the
Commission: Condition No. 166 and Condition No. 17.7 Staff believed the Company addressed
Condition No. 16 in its Petition. Id. at 7. Staff also believed Condition No. 17 would be satisfied
by the County Board’s and the Company’s utilization of public funding, and by Blaine County
residents’ access to energy assistance funding through various programs and resources. Id.
3. Surcharge
Staff noted the Company’s estimated monthly fixed charges for Blaine County
customers was projected to provide funding to fully recover the $9.8 million in incremental costs,
including financing costs, for undergrounding the lines. Id. at 8. Staff recommended that the
Company clearly label the surcharge as its own line item in billing statements for Blaine County
customers. Id.
a. Surcharge Calculation
Staff noted that the proposed surcharge consisted of three components: capital costs,
financing costs, and an annual administrative fee. Staff explained that “capital costs” reflected the
estimated $9.8 million in incremental cost for undergrounding. The “financing costs,” Staff noted,
were established at the Company’s after-tax authorized rate of return of 9.59 percent and should
be updated whenever the Commission approved a new rate of return for the Company. The
“administrative fee” was an annual fee of $35,000 to offset the incremental administrative costs.

6 Condition No. 16 states: “[The] Company shall address the need for a clause in any financing order by the Idaho
Public Utilities Commission to allow for prepayment of any Blaine County only project costs or surcharges towards
the additional costs of the modified project, as well as a procedure for doing so.”
7 Condition No. 17 states: “[The] Company shall address with the P.U.C. the need to provide indigent residents with
financial assistance to meet the additional cost of the surcharge.”
ORDER NO. 35452 10
Staff noted the Company estimated that a surcharge based on 3 percent of billed
revenue in Blaine County would collect $1.1 million on a levelized basis, annually at the current
Blaine County customer counts. Id. Staff further noted the surcharge revenue, forecasted for a 20-
year collection period, is expected to recover the estimated $9.8 million in incremental
ungrounding costs, including financing costs. Id.
4. Accounting Treatment
Staff recommended the Commission authorize the Company to accelerate the
depreciation of the incremental assets to match the 20-year surcharge. Id. at 9. Staff noted the
Company’s proposal to provide annual updates to the County Board and annual reports to the
Commission with supporting workpapers following the implementation of the surcharge. Id. at 9-
10.
5. Tariff Schedule
Staff noted that the charges contained within Schedule 96—the Company’s proposed
tariff concerning the surcharge—would be reviewed, at a minimum, with each general rate case to
ensure the surcharge amounts reflect Blaine County customer growth, the then-authorized rates of
return, and other factors impacting the amount and duration of collection. Id. at 10.
6. Customer Notification and Public Comments
Staff reviewed the customer notice in the Company’s Petition and determined that it
met the requirements of Rule 125 of the Commission’s Rules of Procedure, IDAPA 31.01.01.125.
Id. Staff noted that, as of December 21, 2021, the Commission had received 51 public comments
opposing the proposed surcharge and 5 comments in favor. Id. Staff noted that a few customers
submitted multiple comments, two customers said they were on a fixed income, and three
customers stated they owned farms. Id.
In sum, Staff recommended the Commission approve: (1) the Owl Rock Road Route;
(2) the Company’s proposed surcharge and Schedule 96 as filed, and order the Company to file,
upon project completion, a revised Schedule 96 if updated costs required Schedule 96 to be
modified; and (3) the Company’s request for an Accounting Order as described in the Petition.
Staff further recommended the Commission order the Company to: (1) clearly label the surcharge
as its own line item in billing statements for Blaine County customers; (2) provide to the
Commission the estimated cost of the Owl Rock Road Route when it received final pre-
construction pricing information for the project; and, (3) within six months after project
ORDER NO. 35452 11
completion, file a final determination of the estimated 2017 CPCN route cost and the incremental
project cost for the Owl Rock Road Route, along with any necessary changes to the proposed
surcharge, for review and approval by the Commission.
INTERVENOR COMMENTS
Tidwell
Tidwell filed comments on December 16, 2021, and again on January 14, 2022. Tidwell
commented that the Transmission Line was not necessary for the provision of safe, reliable electric
service. December 16, 2021, Comments at 2. Tidwell stated her belief that it would be less
expensive to run a temporary line and repair the first one rather than building the Transmission
Line. Id. 3. Tidwell wondered why the Company did not install more batteries instead of new
transmission lines. Id. at 3. Tidwell questioned what a homeowner in Carey would “get for this
undergrounding of distribution lines between Hailey and Ketchum and the undergrounding of
transmission lines in Ketchum.” Id.
Tidwell posited that it may be difficult for the Company “to relate to homeowners who
struggle with financial insecurity . . . .” Id. at 4. Tidwell questioned why federal funds could not
be used to pay for the transmission line. Id. at 5. Tidwell asserted that the Company could have
further explored other “non-wires alternatives” like microgrids. Id. at 6.
In her January 14, 2022, comments, Tidwell asserted that the costs that would be
incurred for burying the lines could have been better spent because burying the lines does not
increase the resiliency for households in Carey, Bellevue, and Hailey. January 14, 2022, comments
at 1-2. Tidwell further noted that the price of “distributed generation/batteries” and solar has
decreased over time. Id. at 3-4.
Tidwell claimed that the individual County Board members, the Commission, and the
Company violated open meeting laws and suggested that the Commission recuse itself from the
“ratemaking decision on this case . . . .” Id. at 4.
Cox Communications
Cox understood that the current design of the proposed project has space for its
attachments, but that it “wishes to assure that the Commission specifically orders the same in its
final order . . . to assuage any future challenges.” Cox Comments at 2-3.

ORDER NO. 35452 12
PUBLIC COMMENTS
The Commission received 61 public comments with the majority opposed to paying a
surcharge for the incremental cost of burying the lines. Most commenters explained they would
receive no benefit from burying the lines, that there was no justification for paying extra to bury
the lines, or both. One commenter questioned whether the County Board had the legal authority to
enter into an agreement with the Company that would have a financial impact on voters’ individual
power bills. Other commenters, including irrigators south of Ketchum, expressed that the
surcharge was a heavy burden with no real benefit to them.
A minority of commenters questioned the necessity of installing a redundant line at all–
either because they felt the current line was reliable, or because they felt that alternative options,
including backup generators, would be more workable.
Five commenters expressed support for paying the surcharge for the cost of
undergrounding pursuant to the Owl Rock Road Route. Some commenters appeared to support
paying for undergrounding only if the entire line could be undergrounded, while other commenters
supported the surcharge for additional undergrounding but only if residents in the North Valley
who are served by distribution circuits north of the Wood River Substation paid it.
COMPANY REPLY COMMENTS
Staff
The Company accepted and supported each of Staffs’ recommendations. Company
Reply Comments at 3. The Company particularly agreed with Staff’s recommendation that there
be no adjustments related to their customer impact calculation and Staff’s suggestion that, if
requests for undergrounding are made in the future, “the incremental lifecycle and [operating and
maintenance] costs [should] be included in the Company’s analysis and, if significant, included
for recovery from municipalities. Id. at 3.
Cox
The Company stated that it worked cooperatively with the County Board and Cox to
provide a Transmission Line configuration option that would provide space for the Cox
attachments on the Transmission Line poles. Id. The Company noted that the County Board
approved the Transmission Line configuration based on Exhibit C2 in its March 15, 2021, Findings
of Fact, Conclusions of Law, and Decision granting the Company the Final CUP. Id. at 4. As such,
the Company believed it appropriate for the Commission to recognize the two parties’
ORDER NO. 35452 13
accommodation in its final order in this case “through a similar general statement as provided in
Order No. 33872, Case No. IPC-E-16-28, 2017 CPCN” consistent with the Final CUP. Id. at 4-5.
The Company clarified, however, that it “would not support a broader requirement in
the Commission’s order in this Case that [the Company] provide sufficient space on its
Transmission Line poles to allow the attachment of the Cox Communications Line.” Id. at 5. The
Company explained that such “a broad requirement would create an attachment right that does not
presently exist and could force [the Company] to make additional and expensive changes to the
Transmission Line poles if Cox determine[d] that it would prefer additional space for its
attachments beyond the specified clearances in Exhibit C2.” Id.
Kiki Tidwell
The Company responded to Tidwell’s comment on undergrounding the Transmission
Line in the City of Ketchum, explaining that the necessity of redundant transmission was reviewed
and decided by the Commission when it granted the Company a CPCN in Order No. 33872. Id. at
6. The Company further indicated there was no support for Tidwell’s statement that the overhead
transmission option through the City of Ketchum would be less expensive than the underground
transmission option. The Company asserted that the evidence it introduced in Case No. IPC-E-16-
28 demonstrated why placing overhead transmission through the City of Ketchum was not a viable
option. Id. at 6-7.
The Company agreed that burying the lines between Hailey and the hospital was non-
essential to safe and reliable electrical service but stated that this was the reason why Blaine County
customers were paying for the incremental costs of burial. Id. at 7. The Company further replied
that the benefit of building a new Transmission Line rather than replacing the Existing
Transmission Line was resolved by the Commission in Order No. 33872. Id. at 8.
Contrary to Tidwell’s assertion otherwise, the Company stated it addressed alternative
energy resources at length in connection with the Transmission Line project. Id. at 9. To Tidwell’s
recommendation that the Company install battery storage in place of the Transmission Line, the
Company hypothesized that an outage on the Existing Transmission Line could last for days and
that a backup battery system could not realistically supply the quantity and duration of power
needed to continue service to the North Valley during such an outage. Id. at 11.
To Tidwell’s assertion that the proposed surcharge was regressive and would not
benefit all Blaine County homeowners outside the North Valley, the Company pointed to its
ORDER NO. 35452 14
Petition, and testimony in this case and expressed its belief that, “as a whole, the surcharge as
proposed would provide a reasonable balance for the collection of [incremental] undergrounding
costs from the Company’s customer classes in Blaine County.” Id. at 11-12.
To Tidwell’s comment that the Company’s financing charge for the project was
egregious, the Company explained that it was a normal charge, aligned with its authorized rate of
return, and calculated so that customers outside Blaine County did not subsidize the cost of the
undergrounding. Id. at 12-13.
Notwithstanding Tidwell’s criticisms, the Company explained that the Citizens
Advisory Committee played an essential role in the Company’s planning and development of the
redundant Transmission Line project. Id. 13-14.
The Company noted that several public comments were filed regarding the Company’s
Petition and stated that it addressed the concerns raised by these comments in its response to
Tidwell’s comments. Id. at 14. The Company stated it appreciated the publics’ participation and
repeated its belief that the Owl Rock Road Route and related surcharge provided a reasonable
compromise that balanced the competing interests of the Company’s customers in Blaine County,
while also protecting other customers in the Company's service area. Id.
FINDINGS AND DISCUSSION
The Company is an electric utility subject to the Commission’s regulation under the
Public Utilities Law. Idaho Code §§ 61-119 and -129. 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, 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. By law, public utilities shall
“furnish, provide and maintain such service, instrumentalities, equipment and facilities as shall
promote the health, safety, comfort and convenience of its patrons, employees and the public, and
as shall be in all respects adequate, efficient, just and reasonable.” Id. § 61-302. The Commission
has authority to order a utility to build new structures or upgrade and improve existing plant and
structures to secure adequate services or facilities. Id. § 61-508.
Before constructing “a line, plant, or system,” a public utility providing electrical
service must obtain a CPCN from the Commission (establishing that the “public convenience and
ORDER NO. 35452 15
necessity” requires it). However, a CPCN is not required to extend lines, plant or system in an area
already served by the utility. Id. § 61-526.
The Commission appreciates the considerable time and expense that parties and
participants, including local governments, organizations, and citizens of Blaine County, dedicated
to this case and proceedings before the County Board. This participation has built a robust record
in this case. Likewise, we note the County Board’s efforts to inform and involve its citizens in the
process of determining whether a solution could be reached for the funding, siting and eventual
construction of the Transmission Line. Because the County Board represents Blaine County
citizen’s direct interests, it has the greatest responsibility to demonstrate it is appropriate to agree
to a surcharge that will affect its constituents.
In Order No. 33872 we found that a redundant Transmission Line into the North Valley
was necessary to provide adequate and reliable service and to promote public health, safety, and
convenience. Specifically, we found that the Transmission Line:
is justified by the Company’s own planning standard, supports national reliability
standards, and will increase resiliency in the North Valley. . . . The Company
provided evidence that a major outage could take days or weeks to repair,
particularly given the line’s mountainous terrain and access limitations. An outage
of days or weeks could have devastating impacts, particularly if it occurred in the
middle of winter. The hospital may be unable to provide full services, emergency
responders may be hampered in their ability to do their jobs, and the public may be
without power to heat their homes. We believe this possibility poses an
unacceptable risk to public health and safety. A redundant line would meaningfully
reduce the likelihood that the communities would lose power if the existing line
experienced an outage. . . . We find that a second transmission line would enhance
the reliability and resiliency of Company’s service to the North Valley.

Order No. 33872 at 13-14 (internal citations omitted). These previous findings are
reaffirmed by this Order.
The Company’s Petition requests that we approve modifications to the Transmission
Line route previously approved in Order No. 33872. The Commission notes that in the 2019 CUP
authorizing construction of the Transmission Line under the 2017 CPCN Route the priority was to
bury the transmission and distribution lines. The record in this case shows the Company and the
County Board spent significant time examining various funding alternatives, and conducting
numerous public meetings, and non-scientific polling, to attempt to balance the 2019 CUP’s
preference to underground the entire line with the need to minimize the incremental costs to Blaine
ORDER NO. 35452 16
County customers. These efforts resulted in the Company submitting a modified CUP application
reflecting the plan to implement a surcharge to fund the additional 1.4 miles of Transmission Line
undergrounding and complete undergrounding of the distribution line (Owl Rock Road Route). Id.
at 16-17. After conducting two public hearings, the County Board— comprised of three members
elected by the citizens of Blaine County—approved the Company’s CUP application. Id. at 17.
Based on the record before us, and after carefully considering the unique circumstances
in this case, we find the Owl Rock Road Route for the Transmission Line, modifying the 2017
CPCN granted in Order No. 33872, the three percent surcharge mechanism, and the Company’s
Schedule 96 are fair, just and reasonable. We direct the Company to clearly label the surcharge as
its own line item in billing statements for Blaine County customers. The surcharge line-item must
make clear that the surcharge results from Blaine County’s 2021 CUP requirement to underground
the Transmission Line and other components of the project. Staff should vet the language before
it is included as a line-item on the Company’s Blaine County customers’ power bills. In addition,
the Company must work with Staff to develop an insert to be mailed to customers prior to their
first monthly electricity bill before the surcharge is included that clearly explains the three percent
surcharge as a flat rate in Schedule 96.
We direct the Company to provide the estimated cost of the Owl Rock Road Route to
the Commission when it receives final pre-construction pricing information for the Transmission
Line project. We further direct the Company to file within six months after project completion, a
final determination of the 2017 CPCN Route cost and the incremental project cost for the Owl
Rock Road Route, along with any necessary changes to the proposed surcharge, for review and
approval by the Commission. We also acknowledge the Company’s proposal to provide the
Commission with annual reports and supporting workpapers after the implementation of the
surcharge detailing, among other information, changes to the surcharge amount, customer counts,
and principal and interest amounts.
We also approve the Company’s request for an Accounting Order authorizing the
Company to depreciate the incremental capital costs over the 20-year surcharge period and match
the annual depreciation expense with the actual annual principal payment of the incremental capital
so that the incremental costs are fully depreciated over the same time period as the surcharge is
collected and ensuring that the Company’s retail customer base is held harmless from a revenue
requirement perspective.
ORDER NO. 35452 17
The Company has also requested that the Commission make specific findings in its
Order in this case that its directives in Order No. 33872 and pursuant to the requests in this Petition,
to construct a second 138 kV transmission line carries with it the express authority over any action
or order of other government agencies or local governments that are in conflict with such orders
of the Commission pursuant to Idaho Code § 67-6528. The Commission is unaware of “any
action or order of a governmental agency” in conflict with Order No. 33872 or our findings in
this Order. Rather, the County Board and the Company worked together to present what
became the Company’s Petition in this case. Based on the foregoing, the Commission finds
there is no dispute or conflict to resolve related to the Company’s request and therefore the
issue is not ripe for consideration.
The Commission finds that granting Cox’s request regarding its attachments
unnecessary. The language in the 2019 CUP Cox cites makes clear there is no dispute between
Cox and the Company concerning whether Cox can place its attachments on the Company’s
equipment. However, we encourage the Company and Cox to work together to ensure that no
dispute arises concerning this matter.
The Commission also finds that this Order does not constitute approval of any cost of
the line for ratemaking purposes. The Company must apply to the Commission for inclusion of the
costs of the Transmission Line in its rates at a later date. We also note that our decisions on the
matters raised by the Petition are not without reservations. Although the construction of the new
Transmission Line is necessary, the Commission does not believe that undergrounding the
Transmission Line in the Owl Rock Road Route is necessary for the Company to provide safe and
reliable service to its customers in Blaine County. Undergrounding and maintaining a transmission
line is an expensive undertaking. However, the parties in this case negotiated the undergrounding
of the Transmission Line in the Owl Rock Road Route. We recognize the work and resources
expended by all to reach a solution were significant and applaud those efforts. We find it fair, just,
and reasonable to approve the Company’s Petition so construction on the Transmission Line may
begin. The Transmission Line will allow the Company to continue to provide adequate and reliable
electric service to Blaine County customers and promote the public health, safety, and
convenience.
ORDER NO. 35452 18
O R D E R
IT IS HEREBY ORDERED that the Company’s Petition is granted as filed. The
Commission approves the Company’s surcharge for customers to pay for the incremental
undergrounding costs of the Owl Rock Road Route and associated financing costs, as described in
the Company’s Petition.
IT IS FURTHER ORDERED that the Transmission Line route approved by the 2017
CPCN in Order No. 33872 is modified to include the Owl Rock Road Route as described in the
Company’s Petition.
IT IS FURTHER ORDERED that the Company must clearly label the surcharge as its
own line-item on billing statements for Blaine County customers. The Company must also work
with Staff to develop language for an insert in Blaine County customers’ electric bills that explains
the surcharge and will be sent to customers before the surcharge becomes effective. Additionally,
the Company must provide the estimated cost of the Owl Rock Road Route when it receives final
pre-construction pricing information for the project, and file—within six months after project
completion—a final determination of the 2017 CPCN Route cost and the incremental project cost
for the Owl Rock Road Route, along with any necessary changes to the proposed surcharge, for
review and approval.
IT IS FURTHERED ORDERED that the Company may depreciate the incremental
capital costs of the Transmission Line project over the 20-year surcharge period as described in
this Order and as requested in the Petition and supporting testimony. This Order will serve as an
accounting order approving the shorter depreciation period for the incremental costs to comply
with accounting requirements.
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 regarding any matter
decided in 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.
///

ORDER NO. 35452 19
//Abstained to Avoid Conflict//
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 28th day
of June 2022.

__________________________________________
ERIC ANDERSON, PRESIDENT

__________________________________________
JOHN CHATBURN, COMMISSIONER

__________________________________________
JOHN R. HAMMOND JR., COMMISSIONER
ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\IPC-E-21-25 Wood River Valley\orders\IPCE2125_final_order_rn.docx