20220713Answer to GeoBitmine Petition for Reconsideration-Redacted.pdf

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jr,:.lt - ;,i l;{ \:53 An DACOIPOoflrpdry
P.O. Box 70 (83707)
l22t W. ldaho St.
Boirc. lD E3702
LISA D. NORDSTROM
Lead Counsel
[e-mail]
July 13,2022
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Case No. IPC-E-21-37
Application of ldaho Power Company for Authority to Establish A New
Schedule to Serve Speculative High-Density Load Customers
Dear Ms. Noriyuki:
Aftached for electronic filing is ldaho Power Company's Answer to GeoBitmine LLC's
Petition for Reconsideration & Objection to Late lntervention in the above-entitled matter.
Please handle the confidential information in accordance with the Protective
Agreement executed in this matter.
lf you have any questions about the attached documents, please do not hesitate to
contact me.
Sincerely,
Re
X* fr7(,,1.+r.-*,
Lisa D. Nordstrom
LDN:sg
Enclosure
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
ln ord strom@ ida hopower. com
Attorney for ldaho Power Company
BEFORE THE !DAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORIry TO ESTABLISH NEW
SCHEDULE TO SERVE SPECULATIVE
HIGH-DENSITY LOAD CUSTOMERS.
CASE NO. IPC-E-21-37
IDAHO POWER COMPANY'S
ANSWER TO GEOBITMINE LLC'S
PETITION FOR
RECONSIDERATION &
OBJECTION TO LATE
INTERVENTION
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On July 6,2022, GeoBitmine LLC ("GeoBitmine" or "Petitione/'), a prospective
customer of ldaho Power Company ("ldaho Powe/' or "Company") submitted a Petition
for Reconsideration of ldaho Public Utilities Commission ('Commission') and a Petition
for lntervention as a Pafi ("Petition"). ln its Petition, GeoBitmine (1) "asserts that the
existing 'evidentiary record' before the Commission, as wellas the applicable law requires
that the Commission modiff Order No. 35428 by denying ldaho Power's Application for
approval of Schedule 20"1; and (2) requests the Commission grant its status as a party.
ldaho Power, in accordance with ldaho Code S 61-626 and RP 75 and 331.05 files this
Answer opposing GeoBitmine's Petition.
1 Petition for Reconsideration of GeoBitmine LLC and Petition for lnteruention as a Party, Case No. IPC-
E-21-37, pg. 19.
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 1
The Commission has long held that equa! treatment of similarly situated customers
through separation of utility customer classes with differing rates and service offerings
from ldaho Power or other ldaho utilities remains in conformance with a utility's obligation
to serve and is non-discriminatory. Other states have recognized the significant costs
cryptocurrency miners have imposed on the system and have included moratoriums on
new service, or rates at prices above other customers classes,2 which have previously
been upheld by the U.S. Court of Appeals for the Ninth Circuit.3 GeoBitmine's arguments
that Schedule 20, Speculative High-Density Load ("Schedule 20") 1) falls under the
category of being preferential or discriminatory among various customers;a 2)
discriminates between "old" and "new" customers solely on when they connect to the
system;s and 3) does not meet factors identified by the ldaho Supreme Court in ldaho
Sfafe Homebuilders v. Washington Water Powef are flawed and/or misrepresented.
Based on a review of the Petition, it appears that GeoBitmine's issues with ldaho Power's
apolication of Schedule 20 would be more appropriately addressed through a formal
complaint than through a legal challenge as to the Commission's authority to establish
Schedule 20. ln the event the Commission wishes to address both in this proceeding, the
Company's Answerwillfirst address the Petitioner's challenges to the Commission's legal
2 Electicity Rafes Increase 30% ForBitcoin Miners lnWashinglon, Bitcoinist.com, accessed July 11,2022,
https://bitcoinist.com/electricitv-rates-increase-30-for-bitcoin-miners-in-washinqton/
3 Cytline, LLC v. Public Utility Distict No. 2 of Gnnt County, Washington, S49 Fed.Appx. 656 (March 1 1,
2021). See also Ninth Circuit Affirms Specra/ Power Rate for Cryptocuffency Miners, Sidley
Environmental and Energy Brief, March 18, 2021,
https://sidlevenerqvbloo.sidlev.com/ninth-circuit-affirms-special-power-rate-for-crvptocurrencv-miners/
a Petition for Reconsideration, pg. 12.
5 ld., p9.14.
6 ld.
IDAHO PO\A'ER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION - 2
authority to establish Schedule 20 and will then respond to the Petitioner's complaints
against the Company's determination that it should take service under Schedule 20.
I. THE COMMISSION APPROPRIATELY APPROVED SCHEDULE 20 RATES
AND CLASS DIFFERENTIATIONS !N CONFORMANCE WITH IDAHO LAW.
ldaho Power seeks to reliably and cost-effectively serve all customer needs on its
electric system. This is the core of its business model and Idaho Power is agnostic to the
source of a customer's !oad. The Company does not hold any animus toward emerging
industries like cryptocurrency mining and ldaho Power wishes to sell electricity to
GeoBitmine.
Due to the potentialfor significant load growth from a speculative, power-intensive
industry exacerbating current summer season system constraints, the Company may
need to acquire new resources that may ultimately become stranded when the economics
of cryptocurrency change. To mitigate that risk, while simultaneously meeting its
obligation to reliably serve all customers, Schedule 20 seeks to allocate costs, benefits,
and risks of electric service to speculative, high-density loads in a manner that allows
entities like GeoBitmine to take electric service while not impacting other customer
classes.
Rate and Class Differentiation
GeoBitmine provides numerous references to ldaho Code S 61-315 that as part of
exercising authority over rates, the Commission is forbidden to allow preferential
treatment, advantage, prejudice or disadvantage between ratepayers.T ldaho Code S 61-
315 states that "no public utility shall establish or maintain any unreasonable difference
7 Petition for Reconsideration, pg. 11
IDAHO POIA'ER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 3
as to rates, charges, service, facilities or in any other respect, either as between localities
or as between classes of service" and that the ldaho Public Utilities Commission "shall
have the power to determine any question of fact arising under this section." (emphasis
added)
Schedule 20 complies with ldaho Code S 61-315 because the Commission has
authority to set different rates and charges and establish different terms of service for
different rate classes. Approval of Schedule 20 does not discriminate between similarly
situated customers and is consistent with prior Commission determinations of rate
differentiation.
First, there is a well-established history of Commission-approved rate
differentiation that requires interruptible service as part of utility service in recognition of
the potential system impacts from that customer segment. ldaho Power's Special
Contract with Astaris LLC (fl<a FMC) included interruption capability for the first energy
block of 12O megawafts ('MW') when Astaris was an ldaho Power customer from the
1970s through the early 2000s. More recently, ldaho Power's Hoku Special Contract
contemplated service may be limited when peak demand exceeds available resources
and approved transitional rates to mitigate immediate impact of its load on other
customers.s ln addition to Astaris and Hoku, an existing Special Contract between
PacifiCorp dlblal Rocky Mountain Power, and Monsanto Company (Monsanto was
acquired by Bayer Group ("Bayef) in 2018) retains interruptibility as part of the service
8 ln the Mafter of ldaho Power Company's Application for Approval of a Special Contract to Supply Power
to Hoku Mateials, /nc., Case No. IPC-E-08-21, Order No. 30748 (March 16, 2009).
IDAHO PO\A'ER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION - 4
offering.e !n Rocky Mountain Power's most recent rate case, PAC-E-21-07, the approved
Settlement Stipulation continues to require interruption but does update the associated
interruption credit to Bayer based on the costs of constructing and operating a simple
cycle combustion turbine, valued based on Rocky Mountain Powe/s 2019 lntegrated
Resource Plan.1o Similarly, at Idaho Power's next general rate case once Schedule 20
customers are part of ldaho Power's system, the Company would then evaluate the costs
and benefits of involuntary interruption for Schedule 20 customers.
GeoBitmine is correct that no other existing ldaho Power ratepayer is currently
assessed marginal rates,ll however, marginal rates are not an indication of preferential
treatment as claimed by the petitioner. As found appropriate by the Commission in this
case, the Commission-approved Hoku Special Contract also included marginal-cost
based rates, and it was noted that'a mixed pricing structure is a reasonable approach
toward enabling the integration of certain high load customers."l2 lf the concern is that no
cunent service to customers includes marginal-cost based pricing, ldaho Power has filed
for, and the Commission is currently reviewing, ldaho Power's proposed SpecialContract
with Brisbie, LLC, which also includes a mix of marginal and embedded cost components
s ln the Matter of the Application of PacifiCorp dba Rocky Mountain Powerfor Apprcval of an Electic
Servrbe, Case No. PAC-E-13-14 (filed October 31, 2013).
10 ln the Matter of Rocky Mountain Powels Application for Authoity to lncrease ds Rafes and Charges in
ldaho and Approvalof Proposed Electic Seruice Schedu/es and Regulations, Case No. PAC-E-21-07,
Order No. 35277 (December 30,2021).
11 Petition for Reconsideration, pg. 12.
12 Case No. IPC-E-08-21, Order No. 30748, pg.4
IDAHO PO\A/ER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 5
to integrate the Brisbie load onto ldaho Power's electric system and serve it.13
Based on their general misunderstanding of the applicability of Schedule 20,
GeoBitmine suggests discrimination between "old" and "new" customers based solely on
when they connect to the system.la No such differentiation exists. Schedule 20 is also
applicable to current ('old") ldaho Power customers who choose to engage in
cryptocurrency mining and meet the criteria in Schedule 20.15 ln the spring of 2022, ldaho
Power received interest from existing customers exploring the feasibility of adding some
amount of cryptocurrency mining to their operations. The Company advised those
customers that should cryptocurrency mining become the predominant load for the
customer, Schedule 20 may be applicable even if their current operation receives service
from ldaho Power under Schedule 9 or 19. ln mixed-use applications at the same point
of delivery ('POD'), it is ldaho Power's guideline that the site's predominant load
determines the applicable tariff schedule - such as a residence which also includes a
salon business with multiple high-energy use hair drying machines taking service under
the applicable commercia! schedule, versus residential.
GeoBitmine makes claim that "Schedule 20 was approved by the Gommission in
complete disregard for any of the five factors identified by the ldaho Supreme Court in the
Homebuilders decision."r6 The ldaho Supreme Court interpreted this statute in ldaho
Sfafe Homebuilders v. Washington Water Power ("Homebuilders"), noting that "Not all
13 ln the Mafter of the Application of ldaho Power Company's Application for Approval of Special Contract
and Tariff Schedule 33 to Provide Electric Servrbe to Bisbie, LLC's Data Center Facility, Case No. !PC-E-
2142 (filed December 21,2021).
1a Petition for Reconsideration, pg. 14.
lsApplication, pg. 16.
16 Petition for Reconsideration, pg. 13.
IDAHO POVVER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERAT]ON &
OBJECTION TO LATE INTERVENTION - 6
differences in a utility's rates and charges as between different classes of customers
constitute unlawful discrimination or preference under the strictures of l.C. S 61-31s.'tz
The Court identified cost of service, quantity of electricity used, differences in conditions
of seryice, or the time, nature, and pattern of use as appropriate justifications for setting
different rates and charges to different customers.ls The Homebuilders court also cited
prior decisions stating that, "Absent a legislative pronouncement to the contrary, we find
it within the Commission's jurisdictional province to consider in its rate making capaci$ all
relevant criteria including energy conservation and concomitant concepts of optimum use
and resource allocation."le ln so doing, "a reasonable classification of utility customers
may justify the setting of different rates and charges for the different classes of
customers."2o
The "time, nature, and pattern of use" is a justification for separate classification of
customers, and ldaho Power's Application highlights the transitorv nature of
cryptocurrency mining operations worldwide.2l Cryptocurrency miners explicitly design
their facilities for ease of movement, and marketing of mining facilities stresses the
advantage of certain configurations in ease of movement; "if the electricity prices rise or
political climate changes, al! that the company would need to do is pick up and move."22
17 ldaho State Homebuilders v. Washington Water Power, 107 ldaho 415, 420,690 P.2d 350, 355 (1984).
18 ld.
1e /d., citing Gindstone Butte Mutual Canal Co v. ldaho Public Utilities Commission, I 02 ldaho 175, 1 80-
'181, 627 P.2d 804, 809-81 0 (1 981 ).
20 /d., citing Utah-ldaho Sugar Company v. lntennountain Gas, 1 00 ldaho 368, 597 P.2d 1 058 (1 979).
2lApplication, pg. 3; 13,
22 Reply Comments, pg. 4.
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 7
The quick influx of transitory load into, and potentially out of ldaho Power's service area
creates significant risk that costs created by the transitory load ultimately becomes the
burden of, and results in a cost shift to other customers.
Schedule 20 customer and capacity charges (Service Charge, Demand, Basic
Load Capacity) mirror Schedule g and 19 customer rates. The Company agrees that a
cost-of-service study is an appropriate basis for differentiation of the rates assessed to a
particular customer class, but cost-of-service evaluation will not speak to the ability to be
interrupted. While an important criterion that may be largely dispositive of the legal
rational for price differentiation, cost of service is not a per se essential element without
which ratemaking is invalid.23 The Company supports the Commission directive that after
ldaho Power has evaluated cost assignment based on usage characteristics and system
requirements (such as at the time of a general rate case), the Company collaborate with
Commission Staff 'to then assiqn the cost and benefits incorporatinq interruotion
Igs.!@."24
Marginal Rates
Nearly the entirety of GeoBitmine's discussion around Schedule 20 marginal rates
is factually incorrect. A simple review of the Company's Application,2s Staff Comments,26
23 Gindstone Bufte, 102 ldaho 181,627 P.2d 810. ('The question then is not whether one particular type
of evidence is present in support of the rate differentiation, but, rather, whether the evidence as a whole in
light of the circumstances of the particular case supports the differentiation, substantially, competently and
with a just and reasonable result.')
2a Order No. 35428, pg. 7 (emphasis added).
2sApplication, pg. 15.
26 Staff Comments, pg. 6.
IDAHO PO\A'ER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION - 8
Company Reply Comments,2' ot the Commission's Order2s would have informed
GeoBitmine that marginal energy prices in Schedule 20 are based on lntegrated
Resource Plan ("lRP") Avoided Cost Averages ("ACA"). The Company is unsure how
GeoBitmine reached the conclusion Schedule 20 marginal energy prices "exposes
GeoBitmine and its waste heat off-taker business partners' operations to the vagaries of
the volatile and typically very expensive unregulated spot markets for electricity."zs to
such risk exists.
IRP ACAs are published at the time of IRP filing, and list five (5) season and time-
differentiated prices for the next 20 years. The Company proposed updates to marginal
prices on a two-year cadence mirroring updates to the lRP. IRP ACAs are known,
consistent for each seasonal time-differentiated period during the year, and do not
introduce any of the so-called spot market risk GeoBitmine erroneously claims in their
Petition.
GeoBitmine's misunderstanding of the Schedule 20 offering goes beyond not
understanding the basis for marginal energy rates. Had GeoBitmine modeled proposed
costs under either Schedule 20 or Schedule 19, it would have likely found that Schedule
20 may be more economically advantageous to their operation due to the inclusion of
margina! cost-based energy prices and their treatment under the Power Cost Adjustment
("PCA') mechanism. For instance, for a seven MW load operating at 97.4 percent load
factor with all225 hours of interruption occurring during the summer on-peak period, base
27 Reply Comments, pg. 5.
28 Order No. 35428, pg. 7.
2e Petition for Reconsideration, pg. 6.
IDAHO PO\A'ER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION - 9
charges plus the PCA are approximately $700,000 more under Schedule 19 versus
Schedule 20.
lnterruptible Servrce
GeoBitmine makes severa! broad claims around electric service interruption not
being feasible for any business. First, Schedule 20 includes a maximum ol 225 event
hours each June 15 through September 15 season, up to ten hours between 1 p.m. and
1 1 p.m., Monday through Friday, which even if fully utilized still results in uptime (or load
factor) of 97.4 percent for the year. ldaho Powe/s largest customers do not approach
load factors of 97.4 percent annually, and most data centers project load factors of
approximately 90 percent. ln a version of business forecast shared with ldaho Power,
GeoBitmine's Customer Load lnformation form, Confidential Attachment 1, itself projects
their load factor to be approximat"y I annually. lndependent of load factor,
ldaho Power's successfuldemand response programs include irrigation, commercial, and
industrial participants who may be interrupted up to 60 hours each summer season, and
customers generally participate year-over{ear, finding that interruption to their
operations is feasible.30
GeoBitmine suggests that interruption of power during Schedule 20's interruption
season will result in harm to food production.3l ldaho Power believes the probability that
waste heat is necessary to supplement meteorological conditions for the purpose of
s ldaho Power Schedule 23 - lrrigation Peak Rewards; Schedule 82 - Flex Peak Program;
https://ouc.idaho.oov/Fileroom/PublicFiles/ELEC/lPC/General/Otariff/ldaho%20Power%20Comoanv.odf.
ln the Mafter of ldaho Power Company's Application for Approval to Modify its Demand Response
Prcgrams, Case No, IPC-E-21-32 (filed October 1,2021).
31 Petition for Reconsideration, pg. 5.
IDAHO PO\A'ER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION - 10
potato storage or other greenhouse operations between the hours of 1 p.m. and 11 p.m.
June 15 through September 15 is near zero. Schedule 20's interruption season is
specifically designed to meet the Company's periods of highest system demand which
typically coincide with periods of significant customer cooling need. lt is during the
summer peak season when ldaho Power's system is most constrained and may require
the addition of peak-serving resources to serve new load -- resources with costs at risk
of becoming stranded if the new load is transitory.
Finally, beyond demand response, interruptible service is not uncommon. Several
utilities offer interruptible rates, with some specifically tailored for cryptocurrency mining
operations such as Black Hills Energy32 and Rocky Mountain Power in V[oming.33 ldaho
Power believes GeoBitmine is familiar with these offerings as when GeoBitmine first
requested an estimate of electric rates under a special contract, they shared a competing
rate quote received from Rocky Mountain Power \Afioming under their interruptible rate,
and their Customer Load lnformation form also indicates load factor of with
curtailment during peak." As recently as July 11,2022, the need to interrupt Bitcoin mining
load due to strain of the electrica! system presented itself, this time in Texas. Due to
projected strains on the power grid from a heat wave, the Electric Reliability Council of
Texas requested curtailment from Bitcoin miners, "who are required to turn off their
32 Black Hills Eneryy to serve first customer under new Wyoming Blockchain lntemtptible Seruice Tariff,
Black Hills Energy Press Release, June 21,2022, httos://www.blackhillsenerov.com/news/black-hills-
enerov-to-serve-first-customer-under-new-wvomino-blockchain-interruotible-service-tariff
33 Rocky Mountain Power Schedule 30 - lnterruptible Service Pilot,
https://www.rockvmountainpower.neUcontenUdam/pcoro/documents/en/rockvmountainoower/rates-
requlation/wvomino/rates/03O lnterruptible Service Pilot.pdf
IDAHO PO\A/ER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 11
machines when the state faces energy shortages."il
Further, through the Company's Answer, ldaho Power demonstrates it is following
the Commission's prescribed directive "to continue to evaluate assumptions reqardinq the
risks and need for mandatory interruptible service, the need for non-interruptible service
through special contract or other options for customers with loads below 10 MW.'35
II. IDAHO POWER EVALUATED GEOBITMINE'S REQUEST FOR SERVICE IN A
NON-DISCRIMINATORY MANNER AND APPROPRIATELY DETERMINED
THAT SCHEDULE 20 APPLIES TO THE PETITIONER'S REQUEST BASED ON
THE INFORMATION PRESENTED.
GeoBitmine is a startup cryptocurrency miner domiciled in Puerto Rico who seeks
to leverage the significant cooling requirements of cryptocurrency mining operations by
exhausting the waste heat into greenhouses.
GeoBitmine's Seryrce Requesf
GeoBitmine initially inquired for service from Idaho Power on May 9, 2022,
suggesting they were evaluating siting at the former Hoku plant location in Pocatello and
seeking service in excess of 20 MW, expected to be online by Fall 2022. On May 24,
2022, GeoBitmine submitted a Customer Load Information interest form to ldaho Power
indicating service was now anticipated at a different location and that the load would
initially be between six to seven MW (to be online in less than one month, by June 15,
2022),
During a call on June 8,2022, GeoBitmine made representations to agreements
they had with an existing ldaho Power customer, the J.R. Simplot Company ("Simplot"),
v Bitcoin Minerc Shut Off Rigs as Tbxas Power Grid Nears Bnh& Bloomberg, July 11 , 2022,
https://www.bloombero.com/news/articles/2022-07-1 1/bitcoin-miners-shut-off-riqs-as-texas-power-orid-
nears-brin k#xi4yTvzkq
35 Order No. 35428, pg. 6 (emphasis added).
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION - 12
to lease space at Simplot's Aberdeen site. As Simplot was not a party to the call, nor had
Simplot provided express written consent to ldaho Power for their customer information
to be shared with GeoBitmine, ldaho Power was not able to answer specific site
questions. On that same call, ldaho Power advised GeoBitmine that because their
projected load was forecast to exceed 20 MW, a Special Contract would be required, and
the Company outlined the timeline to negotiate, file, and receive Commission approvalof
a Special Contract, which in the Company's estimate would exceed one year.
On June 28, 2022, a Simplot representative joined a call with ldaho Power and
GeoBitmine and during that cal!, ldaho Power understood that GeoBitmine proposed to
lease a single warehouse building at the Simplot site. Based on an understanding that
GeoBitmine's six to seven MW load would be the overwhelmingly predominant load at
the site, ldaho Power informed Simplot and GeoBitmine that all of the load served at a
single POD would be billed under the same tariff schedule determined by the primary use.
Based on the information provided to ldaho Powerwhich indicated cryptocurrency mining
as the primary load serving activity of the operation, ldaho Power informed both Simplot
and GeoBitmine that Schedule 20 may be applicable.
Applicability of Schedule 20
The Company evaluated GeoBitmine's request for service, based on information
known as of June 28,2022, and determined that Schedule 20 was applicable. As outlined
in Schedule 20, service under the schedule is applicable and mandatory for customers
who can relocate quickly in response to short-term economic signals and meet four or
more of the criteria listed. ln evaluating GeoBitmine's request for service, ldaho Power
determined that the following criteria applied to the prospective load: (1) high energy use
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION .13
density, (2) high load factor, (3) load that is portable and distributable, (a) highly variable
load growth or load reduction, (5) high sensitivity to volatile commodity or asset prices,
(6) part of an industry with potential to quickly become a large concentration of power
demand, and (7) lack of credit history or ability to demonstrate financial viability.
ln its Petition, GeoBitmine suggests the Company has erred in its finding that the
business would respond to a short-term economic signal and suggested it could not
relocate quickly. ln support of these claims, GeoBitmine cited a "GeoBitmine/J. R.
SimploUUniversity of Idaho joint business venture"36 and highlighted that "neither the J.
R. Simplot Company's potato cellar nor the University of ldaho's Agricultural Extension
Research School are able to 'relocate quickly in response to short-term economic
signals"' stating that "the University of ldaho is a state institution and its experimental
research activities probably do not respond at all to short-term economic signals.'37
lnformation presented in the Petition regarding a formal partnership, in fact a joint
venture, with Simplot and the University of ldaho's Agricultura! Extension Research
Schoo! is not information that had been previously supplied to ldaho Power despite
multiple requests for this information to be provided. As such, ldaho Power is open to
evaluating the nature of the joint venture and any contractual agreements which may
support GeoBitmine's claims that it does not qualify for Schedule 20.
It should be cautioned that while GeoBitmine, as shown in Exhibit 1 to the Petition,
has implied partnerships with entities, it is unknown to what extent those "partnerships'
exist. Page 18 of the 24-page slide deck describing the GeoBitmine business model
36 Petition for Reconsideration, pg. 5
37 ld.,pg.7.
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 14
contains the unauthorized use of the ldaho Power logo implying GeoBitmine's partnership
with the Company.3s ldaho Power can affirmatively state it has not agreed to, nor
authorized the use of its logo in GeoBitmine marketing material. Similarly, at this point in
time, ldaho Power has not been provided information by GeoBitmine that would reinforce
its claim of having entered a joint venture with Simplot and/or the University of ldaho. ln
fact, subsequent to the filing of the Petition, ldaho Power spoke with Simplot
representatives who indicated that Simplot does not have a current business relationship
with GeoBitmine.
Figure 1 - GeoBitmine Exhibit 1, GeoBitmine Business Model Presentation, slide
18.
THE POWEN OF PARilEN$INE
ffi ***.rotdaho \
lffin |.lol"ornl tdoobrt,c
^.
Other lmplementation Considerations
ln its Petition, GeoBitmine omits critical facts about their evolving request for
service from Idaho Power, first of which, is an attempt to receive electrical service on a
38 /d., Exhibit 1, filing PDF page 39 of 54.
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 15
preferred, accelerated timeline, leapfrogging all other new industria! customers seeking
to receive service from ldaho Power. GeoBitmine has a pattern of providing unrealistic
timelines for their operations to come online, has provided updates that include significant
fluctuations in planned capacity requirements for their load, and has demonstrated a
desire to bypass the standard process for new customer interconnection.
!ndependent of whether GeoBitmine takes service under Schedule 19 or Schedule
20, the Company is concerned GeoBitmine's most recent preferred interconnection path
seeks to immediately receive service from ldaho Power through a configuration which
may violate the Commission's Master-Metering Rules.3e Through discussions with
GeoBitmine, ldaho Power informed GeoBitmine of its large load interconnection process
and the timing necessary to secure interconnection equipment. Due to recent supply
chain disruptions, that process can take anywhere ftom 12-18 months for a new large
primary service level customer, like GeoBitmine. lt was only after the discussions
regarding Schedule 20 applicability and the lead-time associated with interconnecting a
new primary-service level account when GeoBitmine expressed intent to take service at
the Simplot Aberdeen site through Simplot's existing POD, with Simplot remaining as the
customer of record. That is, Simplot wil! continue with their existing business operations
and GeoBitmine will locate its cryptocurrency operations behind that POD and will
presumably reimburse Simplot for the cost of electricity through a lease or other
arrangement. The Company is concerned the proposed arrangement at Simplot's
Aberdeen location may constitute a violation of the Commission's Master-Metering Rules.
3e The ldaho Public Utilities Commission's Master-Meteing Rules for Electic Utilities,IDAPA
31.26.01.102.
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION - 16
Master metering was recently reviewed by the Commission in evaluation of a
mixed-tenant application of master metering at the State of ldaho Chinden Office
Complex ("Complex"), formerly the Hewlett-Packard Company campus, with the ldaho
Department of Administration ("IDOA') filing for an exemption from Commission master
metering rules in Case No. !PC-E-18-08.40 !DOA purchased the Complex in 2017 and
assumed existing leases with four separate commercial entities in four of the Complex
buildings. Three out of four of the leased buildings were served from the same POD as
the remainder of the Complex, and IDOA planned to move various state agencies to the
Complex building by building as leases expired for the commercial entity tenants. IDOA
was the customer of record for electrical service and requested waiver from the
Commission for provisions of the Master-Metering Rules as well as authority to install
submeters to allow for billing one of the tenants for actual costs of its electric use. ln
denying the exemption, the Commission reiterated that the absence of a direct utility
billing means that the price signal of electricity costs would be lost.al Further the
Commission found:
We understand that the intent of individually metering buildings is
complicated when multiple tenants, each with a ful!-service lease that
includes utilities in the rent payment, occupy the same building. Although it
may be impractical to individually meter multiple tenants in a buiHing, it is
not reasonable to compound that problem by allowing master-metering in
this case. The record shows that the price signal is best preserved through
individua! utility metering.a2
ao ln the Mafter of the Petition of the ldaho Depaftment of Administration for an Exemption from the ldaho
Public Utilities Commission's Master-Metering Rules for Electic Utilities and the ldaho Power Master
Meteing Sfandards, Case No. IPC-E-18-08, filed April 13, 2018.
a1 Case No. IPC-E-18-08, Order No. 34219, pg. 9.
a2 /d, pg. 10.
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION .17
Simplot Aberdeen Site
The Simplot Aberdeen site has experienced a reduction in utilization of available
energy capacity at the site over the last ten years. ln anticipation of consolidation of
activity between locations, ldaho Power filed for approval of a Special Contract at
Simplot's Caldwell plant in 2015.43 Simplot's Caldwell facility replaced three existing
facilities, the Aberdeen location being one of them
The Aberdeen Simplot site, diagramed in Figure 2 below, includes POD at the
meter,
Also diagramed in Figure 2 is the proposed location
of GeoBitmine's facility in yellow
a3 ln the Mafter of ldaho Power Company's Application for Approval of Special Contract and Tariff
Schedule 32 to Provide Electic Servrbe to J.R. Simplot Company's Caldwell Facility, Case No. IPC-E-15-
13, Order No. 33303 (May 22,2015).
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 18
ldaho Power's understanding of GeoBitmine's desire to take service at the
Aberdeen campus is supported by GeoBitmine's own description of the location and
proposed site configuration
The Simplot Aberdeen facility has several potato cellars, some of which are
now vacant and some of which are still used for potato storage. lnitially, the
proposed GeoBitmine facility at the Simplot site would consist of 3 Geo
Datapods adjacent to an approximately thifi{housand square foot potato
cellar owned by the J. R. Simplot Company which the University of ldaho
Research and Extension School is planning on using for academic seed
research. The potato cellar will ultimately be used for high-intensity indoor
commercialfood production by utilizing waste heat from the cryptocurrency
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 19
Geo Datapods which wi!! produce a temperate year-round growing
climate.a
Regardless of under which rate schedule GeoBitmine's load ultimately takes
service, Idaho Power interprets the Commission's Master-Metering Rules as requiring a
separate POD to serve the GeoBitmine load.
I!I. PROCEDURAL IRREGULARITIES & OBJECTION TO GEOBITMINE'S LATE
INTERVENTION
GeoBitmine was not a party to the underlying proceeding yet referencedas
discovery responses that were only available to parties who had intervened - Staff, the
Industria! Customers of ldaho Power ('lClP"), and 2140 Labs LLC. Although their
ratemaking interests are arguably adverse to one another, Mr. Richardson has separately
filed Petitions to lntervene on behalf of lClP and GeoBitmine. lt appears that the
discovery materials gained by one clientwere used for the benefit of anotherwho had not
yet sought permission to intervene nor secured the right to conduct its own discovery.
The right of discovery is limited to parties and is reciprocal under Commission
Procedural Rules 222 and 223. Petitions to lntervene that are not timely filed "must state
a substantial reason for delay" as required by Procedural Rule 73 and GeoBitmine has
not offered one. Generally, late intervention is granted when there is no "prejudice to
existing parties" or if intervention does not result in "unduly broadening the issues."46
However, due to these procedural irregularities, ldaho Power has been denied the
opportunity to conduct discovery of GeoBitmine concerning its interconnection and
potential electric service at Simplot's Aberdeen facility. Consequently, ldaho Power
{ Petition for Reconsideration, pg. 3.
45 rd, pg. 8; pg. 11.
46 IDAPA 31.01.01.073.
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 20
objects to the late intervention to GeoBitmine.
While ldaho Power does not dispute the ability of any person interested in final
Order No. 35428 to petition for reconsideration pursuant to Procedural Rule 331, ldaho
Power believes many of the issues raised in the Petition for Reconsideration pertain to
how ldaho Power subsequently applied Schedule 20 to GeoBitmine and are beyond the
scope of this more generic docket. lf the Commission is so inclined, it could address
GeoBitmine-specific issues in a separate complaint case to be initiated by GeoBitmine or
opened by the Commission on its own motion. ldaho Power and Staff could then conduct
discovery in that complaint proceeding to determine if Schedule 20 continues to be
applicable to GeoBitmine in light of potential changes in GeoBitmine's business
partnerships and risk profile.
IV. CONCLUSION
ldaho Power respectfully requests the Commission deny both GeoBitmine's
Petition for Reconsideration of Order No. 35428, and Petition for lntervention. The
Commission's Approval of Schedule 20 meets the requirements set by ldaho law, and is
consistent with prior Commission orders to reasonably distinguish between differently
situated customer classifications to establish a separate rate schedule in a non-
discriminatory manner. Schedule 20 provides equal treatment of similarly situated
customers through differentiation in rates and service offerings by recognizing the
transitory nature of electric service for Speculative High-Density Load customers.
ln accordance with the Commission's directive to continue to evaluate the
assumptions regarding risks in the need for customers to take service under Schedule
20, upon receipt of documentation of contractual obligations between GeoBitmine,
IDAHO POWER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 21
Simplot, and/or the University of ldaho's Agricultural Extension Research School, the
applicability of Schedule 20 to GeoBitmine may be addressed such that the Company
would be able to offer service to GeoBitmine at their own POD as the customer of record
under the applicable commercial or industrial rate schedule.
The Company's concern regarding potential violations of the Commission's
Master-Metering Rules under what ldaho Power believes is GeoBitmine's preferred
interconnection configuration will not be addressed by granting this Petition. lf that is
GeoBitmine's ultimate goal, the Commission could instead direct GeoBitmine and/or
Simplot to file for an exemption of the Commission's Master-Metering Rules.
Respectfully submitted this 13th day of July 2022
&'-!.ff"u***,
LISA D. NORDSTROM
Aftorney for ldaho Power Company
IDAHO POVVER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO LATE INTERVENTION - 22
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 13th day of July 2022,1 served a true and correct
copy of the foregoing ldaho Power Company's Answer to GeoBitmine's Petition for
Reconsideration & Objection to Late !ntervention upon the following named parties by the
method indicated below, and addressed to the following:
Commission Staff
Riley Newton
Deputy Attorney General
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8,
Suite 201-A (83714)
P.O. Box 83720
Boise, ldaho 83720-007 4
GeoBitmine LLC
Peter J. Richardson
Richardson Adams, PLLC
515 N.27th Street
P.O. Box 7218
Boise, ldaho 83702
lndustrial Customers of ldaho Power
Peter J. Richardson
Richardson Adams, PLLC
515 N. 27th Street
P.O. Box 7218
Boise, ldaho 83702
Dr. Don Reading
6070 Hill Road
Boise, lD 83703
2140 Labs LLC
Elizabeth A. Koeckeritz
Givens Pursley LLP
601 W. Bannock Street
Boise, ldaho 83702
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IDAHO PO\A/ER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION - 23
J.R. Simplot Gompany
James Alderman
General Counsel
J.R. Simplot Company
1099 W. Front Street
Boise, lD 83702
Corporation Service Company
1305 12th Ave Rd
Nampa, lD 83686
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Stacy Gust, Regulatory Administrative
Assistant
IDAHO POVVER COMPANY'S ANSWER TO GEOBITMINE'S PETITION FOR RECONSIDERATION &
OBJECTION TO I.ATE INTERVENTION - 24
BEFORE THE
IDAHO PUtsLIC UTILITIES COMMISSION
GASE NO. IPC-E-21-37
IDAHO POWER COMPANY
CONFIDENTIAL
ATTACHMENT 1