20230502Decision Memo.pdf

DECISION MEMORANDUM - 1 - MAY 2, 2023
DECISION MEMORANDUM

TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
LEGAL

FROM: DAYN HARDIE
MIKE LOUIS

DATE: MAY 2, 2023

RE: IN THE MATTER OF IDAHO POWER COMPANY’S APPLICATION FOR
AUTHORITY TO INCREASE ITS RATES FOR ELECTRIC SERVICE TO
RECOVER COSTS ASSOCIATED WITH NORTH VALMY POWER
PLANT; CASE NO. IPC-E-19-08

IN THE MATTER OF IDAHO POWER COMPANY’S APPLICATION FOR
A DETERMINATION VALIDATING THE NORTH VALMY POWER
PLANT BALANCING ACCOUNT TRUE-UP; CASE NO. IPC-E-22-05

On March 31, 2023, Idaho Power Company (“Company”) filed a Motion for Extension of
Time (“Motion”) to comply with Order Nos. 34349 and 35494.
BACKGROUND
On May 31, 2017, the Commission issued Order No. 33770 in Case No. IPC-E-16-23
approving a settlement stipulation adopting revised depreciation accrual rates to become effective
on June 1, 2017
Also on May 31, 2017, the Commission issued Order No. 33771 in Case No. IPC-E-16-24
approving a settlement stipulation allowing the Company to recover $13.3 million annually and
establishing a balancing account to track costs and recovery of a levelized revenue requirement to
accelerate the depreciation of Valmy Unit #1 and Unit #2 by the end of 2028 for ratemaking
purposes and the decommissioning costs associated with a targeted 2019 Unit #1 exit date and a
2025 Unit #2 exit date.
On May 31, 2019, the Commission issued Order No. 34349 in Case No. IPC-E-19-08
approving several items related to the balancing account, and relevant to this motion, directed the
Company to “file an annual report detailing the amounts recorded to the Valmy balancing

DECISION MEMORANDUM - 2 - MAY 2, 2023
account;” “submit a filing no later than February 28, 2022 to true-up the balancing account with
forecast-to-actuals, with rates to become effective June 1, 2022;” and “work with Staff to identify
documentation for audit and prudence review.” Order No. 34349 at 4.
On August 9, 2022, the Commission issued Order No. 35494 in Case No. IPC-E-22-05
updating the balancing account and affirming the Company’s true-up calculation; however, the
Commission did not issue a determination of prudence for actual investments at that time due to
lack of documentation. As a result, the Commission directed the Company to “file additional
documentation to support a prudence determination as part of the Company’s Valmy Levelized
Revenue Requirement Balancing Account 2022 Annual Review after meeting with Staff to expand
the documentation process.” Id at 6-7.
THE MOTION
Through its Motion, the Company has requested the Commission:
1. Allow the Company to file its 2022 Annual Review as part of the Company’s 2023
General Rate Case (“GRC”) to satisfy requirements in Order No. 34349; and
2. Approve a time extension to file for a prudence determination of actual Valmy
investments to satisfy requirements in Order No. 35494.
Since issuing Order No. 35494, the Company has met with Staff on several occasions to
determine a documentation process that will provide the necessary information for Staff to audit
and determine the prudence of actual investments to be included in the Valmy balancing account.
Finalization of this process is a necessary step to comply with the two Orders described above.
Although the Commission’s Orders relate specifically to Valmy, the issue of obtaining
proper documentation generally applies to Staff’s inability to gather the necessary information it
needs to review prudence of investments in plants the Company owns in partnership with other
utilities, but does not operate. Staff believes that a process is closer to finalization; however, Staff
would like to ensure that the final process (1) applies to all of the Company’s partnered plants; (2)
provides the same level of transparency, access, and information as if the plant is owned and
operated by the Company; and (3) is completed by the time that the Company files its 2023 GRC.
This will ensure Staff has the ability to efficiently and effectively determine the prudence of
investments during the 2023 GRC for all of the Company’s partnered plants (i.e. Valmy and
Bridger Coal Plants).

DECISION MEMORANDUM - 3 - MAY 2, 2023
RECOMMENDATION
Staff recommends that the Company’s Motion be granted. Additionally, Staff recommends
the Commission’s order granting the Motion stress the importance of finalizing the documentation
process such that it (1) applies to all of the Company’s partnered plants; (2) provides the same
level of transparency, access, and information as if the plant is owned and operated by the
Company; and (3) is completed by the time that the Company files its 2023 GRC.
COMMISSION DECISION
Does the Commission wish to grant the Company’s Motion with Staff’s recommendations?

Dayn Hardie
Deputy Attorney General

Udmemos/IPC-E-19-08_IPC-E-22-05 Decision Memo