20221118Final_Order_No_35603.pdf

ORDER NO. 35603 1

Office of the Secretary
Service Date
November 18, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S 2021 INTEGRATED
RESOURCE PLAN
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CASE NO. IPC-E-21-43

ORDER NO. 35603

On December 30, 2021, Idaho Power Company (“Company” or “Idaho Power”) filed an
Application requesting that the Commission acknowledge the Company’s 2021 Integrated
Resource Plan (“IRP”). The IRP is the Company’s biennial report on its plans to adequately and
reliably serve its customers over a period of 20 years through a least-cost, least-risk, resource mix.
On January 19, 2022, the Company filed an update regarding the Boardman to Hemingway
(“B2H”) transmission line project.
The Company’s 2021 IRP evaluated the 20-year planning period from 2021-2040. The
Company represented that its peak load is forecasted to grow 1.4% annually during this 20-year
planning period for both average energy demand and peak-hour demand. The Company stated that
during the 20-year planning period, the Company expected its approximate 600,000 customers
served to increase by approximately 40%. The Company represented that the 20-year plan includes
the addition of 3,790 megawatts (“MW”) of new non-carbon emitting resources including wind,
solar, and storage; new transmission; and 540 MW of demand-side management (“DSM”)
resources.
The Company indicated that the primary goals of its 2021 IRP were to: (1) identify
sufficient resources to reliably serve the growing demand for energy within Idaho Power’s service
area throughout the 20-year planning period; (2) ensure the selected resource portfolio balances
cost and risk, while including environmental considerations; (3) give balanced treatment to both
supply-side resources and DSM measures; and (4) involve the public in the planning process in a
meaningful way.
The Company represented that it used an improved AURORA long-term capacity
expansion approach to model a variety of supply-side and DSM resources and develop several
portfolios that would provide customers with the least-cost, least-risk resource mix. The Company
stated that it selected a 2021 IRP preferred portfolio based on its modeling and analysis.
ORDER NO. 35603 2

The Company represented that its 2021 IRP preferred portfolio contained an Action Plan
(2021-2027) that would: (1) add 120 megawatts (“MW”) of solar photovoltaic (“PV”) capacity in
2022; (2) convert Jim Bridger (“Bridger”) units 1 and 2 from coal to natural gas by summer 2024;
(3) seek acquisition of significant resources to meet energy and capacity needs in 2023-2027; (4)
exit Bridger unit 3 and Valmy unit 2 by year-end 2025; and (5) energize B2H in 2026. The
Company stated that it evaluated its Action Plan under four unique future scenarios: (1) rapid
electrification; (2) climate change; (3) 100% clean by 2035; and (4) 100% clean by 2045.
The Company represented that the notable differences between the 2019 IRP preferred
portfolio and the 2021 IRP preferred portfolio included: an earlier exit from coal, 2028 as opposed
to 2030; converting Bridger coal units 1 and 2 to natural gas; approximately 2,100 MW of new
wind and solar resources; 1,685 MW of storage compared to 400 MW of storage in the 2019 IRP
preferred portfolio; updated demand response (“DR”) programs plus 100 MW of additional DR;
and additional energy efficiency.
The Company’s January 19, 2022, B2H update described the non-binding term sheet
entered between the Company, PacifiCorp, and Bonneville Power Administration (“BPA”) that
addresses ownership roles and operations and asset exchanges. Under the term sheet, the Company
would assume BPA’s prior ownership interest for a total ownership interest of 45%, with
PacifiCorp owning the remaining 55%. The term sheet provided updated details of the capacity
rights. The Company and PacifiCorp agreed to construct a B2H midline series capacitor substation.
The term sheet also described the ownership and operation of the proposed BPA Longhorn
substation and spelled out the agreed upon asset exchange terms for several transmission lines
between PacifiCorp and the Company.
On January 21, 2022, the Commission issued a Notice of Filing and established an
intervention deadline for interested parties. Order No. 35298. Clean Energy Opportunities for
Idaho (“CEO”), Industrial Customers of Idaho Power (“ICIP”), Idaho Conservation League
(“ICL”), Micron Technology (“Micron”), Stop B2H Coalition (“STOP”), and Kiki Tidwell
intervened in this matter. Order Nos. 35305, 35315, 35319, and 35325. On February 23, 2022, the
Commission issued a Notice of Parties. On March 10, 2022, the Commission issued a Notice of
Modified Procedure establishing deadlines for interested parties to comment on the Application
and for the Company to reply.

ORDER NO. 35603 3

COMMENTS
1. Staff Comments
Staff’s engagement during the 2021 IRP development cycle and its review of the final
report was heavily focused on improvements to the Company’s IRP processes, and the need to
ensure system reliability. Staff’s review for the 2021 IRP included an analysis of the Company’s
methods to:
• Measure and assure reliability of the Company’s system;
• Identify deficits through its Load & Resource Balance;
• Develop resource portfolios and select the least cost least risk preferred portfolio;
• Determine the Company’s natural gas forecast;
• Verify assumptions for existing and future supply-side resources;
• Verify assumptions for existing and future demand-side resources;
• Include public participation in the Company’s IRP process; and
• Develop the Company’s Action Plan.
Staff noted the substantial efforts by the Company to improve its methods and how the
Company conducted its public engagement process. Staff believed that, compared to the Second
Amended 2019 IRP (“2019 IRP”), the Company’s efforts had improved the credibility of the 2021
IRP results.
Staff was encouraged by the progress the Company had made in evaluating its own process
and the number of improvements implemented in the 2021 IRP. Staff noted key improvements
implemented in the 2021 IRP, which included:
• Implementation of a reliability model integrated with the Company’s overall IRP
methodology that builds portfolios based on a Loss of Load Expectation (“LOLE”)
target and provides closed-loop verification that portfolios meet the target over the
20-year planning horizon;
• Determination of the peak-serving capability or Effective Load Carrying Capability
(“ELCC”) of renewable and time-limited resources using probabilistic best practice
processes and based on historical output data;
• The ability of the Long-Term Capacity Expansion (“LTCE”) software to cost
optimize the mix of resources within the Company’s system;
ORDER NO. 35603 4

• Methods to verify that the Company’s models operated as expected and validated
that the model produced cost optimized portfolios for the Company’s system; and
• Modifications to the Company’s DR programs as a result of its reliability evaluation
processes and identification of the hours when capacity needs are the greatest.
Ultimately, Staff recommended that the Commission acknowledge the Company’s 2021
IRP, and Staff recommended that the Company address the following in the Company’s 2021 IRP
Action Plan:
1. Re-evaluate its Action Plan to not include acquisition of specific types of resources
where a broadly scoped RFP is appropriate; and
2. Develop a Bridger exit agreement with PacifiCorp that determines potential costs of
extending or exiting operations early similar to the exit agreement developed for the
closure of Valmy and incorporate those costs into its coal plant exit costs to properly
value different exit dates in its 2023 IRP.
Staff also recommended the Company address the following in the 2023 IRP:
1. Incorporate extreme weather events and variability of water availability through its load
and resource input assumptions, rather than compensating by changing the LOLE
reliability target, which should be set as a matter of public policy;
2. Only include market access backed by firm transmission reservations in its Load and
Resource Balance;
3. Evaluate the risks and inaccuracies caused by using a single benchmark year (2023) to
determine the LOLE-based Planning Reserve Margin;
4. Provide a comprehensive Quality Assurance plan to verify and validate its models by
describing the purpose of each test, how the test was conducted, and the result; and
5. Study the costs and benefits of implementing a flexible resource strategy.
a. Company Reply Comments
With respect to Staff’s comments on the Company’s 2021 IRP Action Plan, the Company
was aligned with Staff’s comments that a sufficient set of alternative resources was required to
allow for a competitive bidding in the Company’s RFP to obtain a reasonable low-cost resource.
With respect to a Bridger exit agreement, the Company reasoned that due to the uncertainty
of exit dates at Bridger, the Company included an Action Plan item to plan and coordinate with
PacifiCorp and regulators for the exit/closure of Bridger Unit 3 by year-end 2025 with Bridger
ORDER NO. 35603 5

Unit 4 following the Action Plan window in 2028. The Company recognized that the negotiation
of exit agreement(s) is critical for the 2023 IRP and was working with PacifiCorp, as well as
necessary stakeholders, and more details would be shared as available in the 2023 IRP.
2. CEO Comments
CEO congratulated the Company on the improvements recently introduced; however, CEO
noted its concern regarding remaining limitations in the software and analytical processes
employed to produce the IRP plans. CEO suggested that Idaho Power consider two areas for review
before developing the 2023 IRP.
CEO suggested that the Company improve the ability of the software used (whether Aurora
or some other product) to analyze effects of battery storage on diurnal market price patterns. CEO
reasoned that software system limitations produced questionable data with respect to the forecast
Mid-C hourly price spreads that seemed unreasonably large, and the benefit associated with
increased access to Mid-C market may have been overvalued.
Further, CEO suggested that the Company improve the method for estimating the present
value of various portfolios to remove an existing bias that minimizes out-year costs of inputs that
rise in cost over the 20-year forecast period (such as those associated with natural gas prices or
carbon emissions charges).
a. Company Reply Comments
The Company, in response, believed that CEO’s arguments for lowered daily price spreads
resulting from increased energy arbitrage due to battery storage were unsupported and counter to
the data presented in the IRP. Further, the Company contended that CEO’s conclusion, that
portfolios such as those with the B2H transmission line with enhanced access to Mid-C markets
might have been materially overvalued in the 2021 IRP analyses, was unsupported conjecture and
was counter to the data. The Company concluded that the IRP modeling showed that the next least
cost portfolio without B2H under planning conditions was $266 million more expensive on a net
present value basis than the Preferred Portfolio with B2H.
Further, Idaho Power disagreed with CEO’s belief that the appropriate base for converting
future year cost estimates back to a present value required using a discount rate that reflected the
customer’s cost of short-term funding. The Company believed that using its authorized after-tax
weighted average cost of capital (“WACC”) to discount the cost of modeled portfolios was
ORDER NO. 35603 6

appropriate because that rate best represented the overall long-term cost of capital to the Company
in financing its operations.
3. ICL Comments
ICL commented that the 2021 IRP was an incremental improvement in some areas
including an improved assessment of the Bridger coal exit dates, an improved assessment of clean
energy options, and an improved modeling of Demand-Side Resource Potential. However, ICL
noted what it believed to be flaws in the IRP planning process that it believed the Commission
should direct Idaho Power to address. Specifically, ICL reasoned that the Bridger conversion was
late in the process and used speculative inputs; that the gas price forecast was wrong and Idaho
Power’s method of analysis lacked the transparency required for rigorous evaluation; and that
Idaho Power’s 2021 IRP neglected to model the resource capacity of customer-owned solar and
storage resources.
ICL concluded that the 2021 IRP represented an incremental improvement from the 2019
IRP, especially in how the Company refined the capacity expansion modeling approach. ICL
appreciated Idaho Power’s assessment of Bridger closure dates and clean energy options, and the
inclusion of alternative future scenarios that allowed for a useful assessment of how to build
resource portfolios that addressed probable policy outcomes. However, ICL strongly questioned
the Bridger gas conversion assessment due to its last-minute nature and speculative model inputs,
as well as Idaho Power’s use of a gas price forecast that resulted in already out-of-date prices. ICL
urged Idaho Power to model the potential of customer generation for its resource portfolio. ICL
recommended the Commission acknowledge these improvements and direct Idaho Power to rectify
the flaws in future IRPs.
a. Company Reply Comments
Idaho Power disagreed with ICL’s assessment that late consideration of the Bridger
conversion limited stakeholder’s ability to collaborate with the Company. The Company also
contended that ICL’s claim of the speculative nature of the modeling inputs to assess the
conversion was baseless. Additionally, Idaho Power argued that its gas price forecast methodology
was not “secret” as ICL claimed, rather the natural gas price forecast methodology was presented
by the forecast vendor directly to the Integrated Resource Plan Advisory Council on March 11,
2021, a follow up discussion was held on June 10, 2021, and an abridged version of the forecast
methodology and drivers was provided in the 2021 IRP.
ORDER NO. 35603 7

4. Micron Comments
Micron applauded Idaho Power’s efforts to collaborate with large customers to acquire
renewable resources and encouraged Idaho Power to continue those efforts as the Company
transitions away from coal-fired generation. However, Micron cautioned the Commission to
ensure Idaho Power planned future resource procurement with an eye toward other large loads that
might transition to customer-specific resources to ensure it does not procure excess resources.
While Micron supported Idaho Power’s clean energy transition, Micron was also sensitive
to the rate impacts that could arise from early retirement of existing thermal generating units and
investment in new renewable resources and energy efficiency measures. Micron believed that
Idaho Power must ensure that its clean energy transition did not result in excessive rate impacts,
and Micron encouraged Idaho Power to continually investigate strategies to mitigate energy
transition rate impacts and implement such strategies where appropriate.
a. Company Reply Comments
In response to Micron’s comments, Idaho Power noted that through the IRP process, the
Company sought to produce a portfolio of resources that represented the least-cost, least-risk path
to serving its customers' needs over the planning horizon.
5. Tidwell Comments
Ms. Tidwell argued that the preferred plan IRP put her at risk, as a small Idaho Power
ratepayer, to the Company’s insufficient planning for the availability and cost of purchased power,
and the additional millions of tons of carbon dioxide the Company would emit into the air through
its own resource generation. Specifically, Ms. Tidwell commented that the preferred plan left a
shortfall gap to achieve the Company’s stated 100% by 2045 goal of at least 23% to be achieved
between 2041 and 2045. Ms. Tidwell concluded that Idaho Power had not submitted a plan with a
prudent path to achieve its own stated goal, a goal that was vital to Idahoans who were living with
the effects of climate change.
a. Company Reply Comments
With respect to Ms. Tidwell’s concerns, the Company was confident that the selected
Preferred Portfolio was the best combination of least cost and least risk.
6. Public Comments
The Commission received twenty-one (21) public comments. Many of the comments were
positive concerning Idaho Power’s anticipated conversion of Bridger away from coal. However,
ORDER NO. 35603 8

many of the comments indicated that conversion to gas was not as preferable as a conversion to
other cleaner and renewable options. In contrast, one commenter stressed the importance of
maintaining coal operations in Idaho.
COMMISSION DISCUSSION AND FINDINGS
Idaho Power is an electrical corporation and public utility as defined in Idaho Code §§ 61-
119 and -129, and the Commission has jurisdiction over it and the issues in this case under Title
61 of the Idaho Code, including Idaho Code § 61-501. Having reviewed the record, we find that
Idaho Power’s 2021 Electric IRP satisfies the requirements in the Commission’s prior orders. We
thus acknowledge that Idaho Power has filed the 2021 IRP. In doing so, we once again reiterate
that an IRP is a working document that incorporates many assumptions and projections at a specific
point in time. It is a plan, not a blueprint, and by issuing this Order we merely acknowledge Idaho
Power’s ongoing planning process, not the conclusions or results reached through that process.
With this Order the Commission does not approve the IRP or any resource acquisitions referenced
in it, endorse any particular element in it, opine on Idaho Power’s prudence in selecting the IRP’s
preferred resource portfolio, nor allow or approve any form of cost recovery. The appropriate place
to determine the prudency of the IRP or Idaho Power’s decision to follow or not follow it, and the
validation of predicted performance under the IRP, is a general rate case or other proceeding where
the issue is noticed.
The Commission notes the concerns expressed by some parties with the procurement lead
time and limitations for resource options to determine the least cost least risk portfolio, and the
Commission appreciates the continued engagement of parties in the IRP process. The Commission
appreciates Idaho Power’s efforts to improve upon the 2021 IRP, and the Commission believes
that the best approach is for Idaho Power to continue to work through those expressed concerns,
technical issues, and disputes with all parties in the IRP process. The IRP planning process
attempts to ensure that Idaho Power is well-positioned to meet the demands of a changing energy
sector. While there are inherent limitations in trying to predict a multitude of conditions over the
next 20 years, the planning process is worthwhile when Idaho Power strenuously evaluates model
inputs, verifies the model logic, and collaborates with engaged stakeholders. Doing so helps ensure
that Idaho Power can continue to provide reliable and economical service to its customers as the
energy sector evolves.

ORDER NO. 35603 9

ORDER
IT IS HEREBY ORDERED that the filing of Idaho Power’s 2021 IRP is acknowledged.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon 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 and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 18th day of
November 2022.

ERIC ANDERSON, PRESIDENT

//ABSTAIN TO AVOID CONFLICT//
___
JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER
ATTEST:

Jan Noriyuki
Commission Secretary

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