20220919Reconsideration_Order_No_35532.pdf

ORDER NO. 35532 1

Office of the Secretary
Service Date
September 19, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On March 10, 2022, Idaho Power Company (“Company” or “Idaho Power”) applied to the
Commission for an order approving the Revised Special Contract (“Micron ESA” or “ESA”) with
Micron Technology, Inc. (“Micron”) and a power purchase agreement (“Black Mesa PPA” or
“PPA”) with Black Mesa Energy, LLC (“Black Mesa”).
On April 6, 2022, the Commission issued a Notice of Application and Notice of Modified
Procedure setting public comment and Company reply deadlines. Order No. 35367. Industrial
Customers of Idaho Power Company (“ICIP”) intervened, Order No. 35406, but did not file
comments. Staff filed comments to which the Company replied. No other comments were
received.
On August 1, 2022, the Commission issued Order 35482, approving the Black Mesa PPA,
as filed, but directing the Company to file an updated ESA and Schedule 26 addressing the
Commission’s modifications.
On August 22, 2022, the city of Boise City (“Boise City”) filed a Petition for
Reconsideration and a Petition to Intervene, and the Company filed a Petition for Clarification and
Reconsideration.
Staff filed an Answer to Boise City’s and the Company’s petitions on August 29, 2022.
With this Order, we grant the Company’s Petition for Clarification and Reconsideration and Boise
City’s Petition to Intervene, and grant in part and deny in part Boise City’s Petition for
Reconsideration.
ORDER 35482
The Commission approved the Black Mesa PPA, as filed. However, the Commission
ordered the Company to make certain modifications to the treatment of excess generation credit(s)
(“EGC(s)”) and renewable capacity credit/s (“RCC(s)”) under the Micron ESA. In addition, the
IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
APPROVAL OF A REPLACEMENT
SPECIAL CONTRACT WITH MICRON
TECHNOLOGY, INC. AND A POWER
PURCHASE AGREEMENT WITH BLACK
MESA ENERGY, LLC
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CASE NO. IPC-E-22-06

ORDER NO. 35532
ORDER NO. 35532 2

Commission found “it fair, just, and reasonable that the credits for excess energy and capacity
included in power supply expense be subject to 95% sharing in the [Power Cost Adjustment
(“PCA”)].” Order No. 35482 at 18. The Commission ordered the Company to file an updated ESA
and Schedule 26 addressing the Commission’s modifications by October 30, 2022.
COMPANY’S PETITION
A. Clarification
The Company requested clarification on one issue: how to calculate the RCCs for Micron
under the ESA. Specifically, the Company requested the Commission clarify whether it intended
the Company modify just how RCC payments will be made or whether it intended the Company
modify both the RCC calculation and the method for determining the Capacity Contribution Factor
(“CCF”). The Company pointed to the Commission’s directive that the RCC utilize the rate and
payment structure for Public Utility Regulatory Policies Act of 1978 (“PURPA”) Integrated
Resource (“IRP”)-based energy storage projects. Company’s Petition at 2. The Company had
proposed that the rate structure for the RCC be based on the capacity contribution of all variable
energy limited resources in the Company’s 2021 IRP. Company Reply Comments at 12. The
Company mentioned that to calculate the RCC, it was necessary to determine the CCF. However,
the Company noted that both Staff and the Commission were silent on the method for determining
the CCF.
The Company represented that it had a discussion with Staff on August 17, 2022, regarding
the Commission’s modifications to the RCC. As a result of this discussion, the Company stated its
belief that the Commission intended that Micron’s RCC would “be paid on a dollars-per-kWh
basis for energy delivered in peak and premium peak hours as identified by the PURPA IRP-based
storage project methodology.” Company’s Petition at 3. The Company requested that, if it is
mistaken about how the Commission wished RCC payments to be calculated, the Commission
issue clarification on this issue.
B. Reconsideration
The Company also requested the Commission reconsider its finding that EGCs and RCCs
included in the Company’s power supply expenses be subject to 95% sharing in the PCA. The
Company argued that it had “no control over the two components that comprise excess energy
payments: excess energy volumes and market prices at the time excess energy occurs.” Id. at 4.
ORDER NO. 35532 3

The Company further argued that applying a 95% sharing provision resulted in the
Company either under-recovering 5% of the excess energy payments or Micron only being
“compensated for 95% of the market-based value of its excess generation.” Id. at 5. The Company
made the final argument that in all other cases where the Company established pricing or
compensation based on avoided cost, the Company was permitted to collect 100% of the costs
from all customers.
BOISE CITY PETITIONS
A. Reconsideration
Boise City argued that the Commission violated Boise City’s due process rights in Order
No. 35482 by improperly making “programmatic decisions” to the Clean Energy Your Way
Construction Option program (“CEYW – CO”)—the subject of Case No. IPC-E-21-40—without
adequate notice. Boise City Petition for Reconsideration at 2. Boise City also argued that, based
on the record, the Commission lacked adequate justification for disregarding the pricing structure
of the ESA negotiated by Micron and the Company and imposing its own pricing structure. Last,
Boise City argued that the Commission imposed discriminatory pricing components through the
modifications it ordered the parties to make to their ESA.
B. Intervention
Boise City explained that, as a large Idaho Power customer with Schedule 7, 9, and 19
electric service accounts and multiple solar panel installations and net metering facilities, it had a
direct and substantial interest in the proceeding and would not unduly broaden the issues if it were
granted intervention.
Boise City’s Petition to Intervene was untimely. Boise City explained that it did not
intervene in this case because it did not have reason to believe that programmatic changes to the
CEYW-CO would occur in this case rather than Case No. IPC-E-21-40. Boise City further
explained that it would be deprived due process and the opportunity to appeal an adverse decision
on reconsideration if its Petition to Intervene was not granted. No party opposed Boise City’s
Petition to Intervene.
STAFF’S ANSWER
A. Response to Idaho Power
Staff generally agreed with the Company’s representations regarding Staff’s position on
determining the CCF and application of a “time of output” rate structure for payments for the RCC.
ORDER NO. 35532 4

Staff Answer at 3. Staff also agreed with the Company’s statement that the annual value of
Micron’s RCC would be “paid on a dollars-per-kWh basis for energy delivered in peak and
premium peak hours as identified by the PURPA IRP-based storage project methodology.” Id.
Staff acknowledged that it did not consider the specific calculations of the RCC rates and
the determination of the CCF. Staff understood that the PURPA energy storage payment
structure—the structure which Staff recommended the Company implement—departed from
previous PURPA rate structures when it was initially developed in Case No. IPC-E-20-02. Staff
noted that the "hallmark” of this rate payment structure is its pricing for production delivered
during “peak” and “premium peak hours.” Id. at 3. Staff asserted that peak and premium peak
hours are, essentially, the hours that define the need for future capacity on the Company's system.
Id. Staff reasoned that “since the energy storage payment structure was implemented, new
methods in the IRP process for determining the amount of capacity resources can contribute to the
system and identifying critical times of need have been developed.” Id. Staff stated the RCC rate
structure it was recommending is “a synthesis of the new information and methods developed in
the Company’s most recent IRP with the methods for determining the PURPA energy storage
capacity rate structure.” Id.
Staff noted this approach required integration with the updated IRP methods and
information. Thus, Staff recommended that the Company work with Staff to develop an RCC rate
structure which it could then provide to the Commission as a compliance filing in this case.
Regarding sharing under the PCA, Staff believed the record, including Staff’s comments,
supported the Commission’s finding that credits for excess energy and capacity included in power
supply expenses be subject to 95% sharing in the PCA. However, Staff was willing to submit
further written comments on this issue.
B. Response to Boise City
Staff did not reply to Boise City’s assertion that the Commission improperly made changes
to the CEYW – CO program in this docket. Staff reiterated its position that the Company’s No-
Harm Analysis was insufficient. Staff maintained its belief that the pricing components the
Commission directed the parties implement under the Micron ESA were fair and reasonable.
However, Staff stated it was prepared to file additional comments should the Commission grant
reconsideration of the issues raised by Boise City’s Petition for Reconsideration.

ORDER NO. 35532 5

COMMISSION FINDINGS AND DECISION
A. Legal Standards
Reconsideration provides an opportunity for a party to bring to the Commission’s attention
any question previously determined and thereby affords the Commission an opportunity to rectify
any mistake or omission. Washington Water Power Co. v. Kootenai Environmental Alliance, 99
Idaho 875, 879, 591 P.2d 122, 126 (1979). The Commission may grant reconsideration by
reviewing the existing record, by written briefs, or by evidentiary hearing. IDAPA
31.01.01.311.03. Once a petition is filed, the Commission must issue an order saying whether it
will reconsider the parts of the order at issue and, if reconsideration is granted, how the matter will
be reconsidered. Idaho Code § 61-626(2). If reconsideration is granted, the Commission must
conclude its reconsideration of the matter, including any hearings, comments, or interrogatories,
within 13 weeks and 21 days from the service date of the order being reconsidered. Id. Once the
matter is fully submitted for reconsideration, the Commission must issue its final order upon
reconsideration within 28 days. Id.
Consistent with the purpose of reconsideration, the Commission’s Rules of Procedure
require that petitions for reconsideration “set forth specifically the ground or grounds why the
petitioner contends that the order or any issue decided in the order is unreasonable, unlawful,
erroneous or not in conformity with the law.” Rule 331.01, IDAPA 31.01.01.331.01. Rule 331
further requires that the petitioner provide a “statement of the nature and quantity of evidence or
argument the petitioner will offer if reconsideration is granted.” Id. A petition must state whether
reconsideration should be conducted by “evidentiary hearing, written briefs, comments, or
interrogatories.” IDAPA 31.01.01.331.03. Grounds for reconsideration or issues on
reconsideration that are not supported by specific explanations may be dismissed. IDAPA
31.01.01.332.
Rule 73 of the Commission’s Rules of Procedure provides in pertinent part that:
[P]etitions to intervene must be filed at least fourteen (14) days before (1) the
deadline for filing initial comments, if the case is being processed by modified
procedure . . . . Petitions not timely filed must state a substantial reason for delay.
The Commission may deny or conditionally grant untimely petitions for failure to
state good cause for untimely filing, to prevent disruption, prejudice to existing
parties or unduly broadening the issues, or for other reasons.

IDAPA 31.01.01.73.

ORDER NO. 35532 6

Rule 74 of the Commission’s Rules of Procedure provides in pertinent part that: “[i]f a
petition to intervene shows direct and substantial interest in any part of the subject matter of a
proceeding and does not unduly broaden the issues, the Commission or the presiding officer will
grant intervention, subject to reasonable conditions.” IDAPA 31.01.01.74.
B. The Company’s Petition
i. Clarification
The Company requests clarification on the calculation of RCCs under the ESA.
Based on its recitation in its Petition for Clarification, the Company’s method for
calculating the RCC appears to be correct and aligned with our directive in Order No. 35482. We
note Staff’s representation that it generally agrees with the Company’s articulation of the standard
for calculating the RCC. Staff recommended that it and the Company work together to develop an
“RCC rate structure which it could then provide to the Commission as a compliance filing in this
case.” Staff’s Answer at 3.
The method of calculating the RCC we directed the Company to use in Order No. 35482
departs from traditional IRP-based methodologies and incorporates new methods developed from
the most recent IRP. Thus, we believe it would be beneficial for the Company and Staff to work
together to develop a rate structure for calculating Micron’s RCC under the ESA which the
Company can then file as a compliance filing in this case. This will confirm that the Company has
fully implemented and understood our intent for the treatment of RCCs under the ESA.
ii. Reconsideration
The Company requests that the Commission reconsider its directive that excess energy and
capacity payment included in power supply expenses be subject to 95% sharing in the PCA. Staff
believes the existing record supports the Commission’s determination in this regard but states its
willingness to supplement the record if the Commission wishes to reconsider this issue.
We find that reconsidering this issue would be beneficial as it would allow Staff, Boise
City, and the Company to augment the record with written comments expressing support or
opposition to the application of the 95% sharing mechanism under the PCA to excess energy
payments. Staff shall have until October 18, 2022, to file written comments, associated documents,
affidavits, and relevant evidence, if necessary, supporting its position on this issue. The Company
and Boise City shall have until October 28, 2022, to file a reply, associated documents, affidavits,
and relevant evidence.
ORDER NO. 35532 7

C. Boise City’s Petition for Reconsideration
Boise City argues that the Commission violated its due process rights in this case because
it made decisions affecting the entire CEYW-CO program without notifying affected parties.
Specifically, Boise City argues that the “fundamental holding” in Order No. 35482 is that the
Commission will analyze the Micron ESA and other CEYW-CO projects based on traditional
principles and historical data. Boise City Petition for Reconsideration at 2. Boise City further
argues that the Commission’s statements that its capacity findings in this case will “create
methodological consistency between CEYW – CO projects” and that it will review every CEYW
– CO project PPA individually, constitute a deprivation of due process for other CEYW – CO
project participants. Id. at 2-3. We decline to reconsider this issue.
It is important to distinguish findings from the rationale and analysis used to support them.
Although the Commission may analyze contracts under the CEYW – CO program using cost of
service (“COS”) principles and historical data, this does not foreclose the Commission from using
additional criteria or principles in its analysis of other CEYW – CO contracts. In addition, the
argument that the Commission deprived other CEYW – CO participants of due process because it
identified an analysis in this case that could be consistently applied to other similar cases conflates
the process with actual results—applying a consistent analysis should not be construed to dictate
the same outcome in every case.
Every ESA and PPA under the CEYW – CO program will be reviewed individually. If,
based on the facts of the particular case, it appears that contract terms negotiated by the Company
and the CEYW – CO customer are reasonable and satisfy the necessary criteria, then those terms
will be accepted. Nothing in Order No. 35482 proscribes the Company or its customer from
proposing that the Commission review and analyze its contract in a certain way in future CEYW
– CO cases. We do not anticipate this is a one-size fits all program. Last, as set forth in greater
detail in our discussion regarding Boise City’s Petition to Intervene, a cursory review of the filings
that were publicly available in this case would have provided some indication that the decisions
made in this case were related to Case No. IPC-E-21-40.
Boise City next argues the record did not support the Commission disregarding the
Company’s own No-Harm Analysis and implementing a framework based on traditional principles
of COS and avoided cost based on historical data. The record demonstrates that the No-Harm
analysis was insufficient because it relied on a single set of assumptions that could change over
ORDER NO. 35532 8

the life of the Micron ESA. The Company acknowledged that its analysis relied on a “single set of
input assumptions” and did not, as Staff noted, provide a “range of values for different risk
variables.” Id. at 3. The Company explained that its analysis did rely on methods associated with
the IRP forecast. Id. In Order No. 35482 we found that traditional principles of cost of service and
avoided cost based on historical data and approved by the Commission provide a reasonable and
proven framework for analyzing the pricing and compensation structure under the Micron ESA.
The Commission also noted that it anticipated the Company working with Staff to refine a no-
harm analysis that supports a fair and mutually agreeable pricing and compensation structure. The
Commission finds the record in this case supports its previous finding in Order No. 35482 that the
Company’s No-Harm analysis was speculative when compared to proven principles and historic
data and did not provide a sufficient basis for imposing certain price components under the ESA.
Based on the forgoing, we decline to reconsider this issue.
Boise City next argues that the method for calculating EGCs would have a discriminatory
effect on other CEYW-CO customers. Although the Commission does not find that Order No.
35482 has any discriminatory effect, we find it would be beneficial to supplement the record with
additional information and arguments in support and opposition to applying this method. Staff
shall have until October 18, 2022, to file written comments, associated documents, affidavits, and
relevant evidence, if necessary, supporting its position on this issue. Boise City shall have until
October 28, 2022, to file a reply, associated documents, affidavits, and relevant evidence.
Finally, Boise City makes the additional arguments that the Commission improperly
applied the method used for energy storage projects under PURPA to determine the RCC amount
and applied an arbitrary and superseded model in establishing the RCC eligibility date (“RCCE”)
in the Micron ESA. Boise City also argued that the 95% sharing mechanism under the PCA is
discriminatorily applied—an issue we already addressed in considering the Company’s Petition.
As we articulated in Order No. 35482 and this Order, the Company’s No-Harm analysis
was insufficient. Accordingly, we considered a proven, and reasonable method for calculating the
RCC. We are not persuaded by Boise City’s argument that the PURPA energy storage method
deprives Micron of the capacity benefit the Black Mesa energy resource will deliver to the system.
Rather, we believe that the energy storage method is the best way, so far, to calculate the capacity
benefit a resource like the Black Mesa project delivers to the system. Under this method, resources
are compensated for the energy they actually deliver to the system. We believe the record in this
ORDER NO. 35532 9

case is sufficient to support our method of calculating the RCC under the Micron ESA, so we
decline to grant reconsideration on this issue.
In determining the RCCE date, we applied the method we use for PURPA that is consistent
with principles of avoided cost and previous Commission practices. We note, as we previously
stated, that the Company did reconsider this issue. Contrary to Boise City’s assertion, we do not
believe that establishing an RCCE date for the Micron ESA based on the first capacity deficiency
date in the most recently acknowledged IRP at the time the PPA is signed is arbitrary or adds
additional uncertainty. We also note that the Company did not include the Black Mesa resource as
a resource to meet its capacity deficiency date. Based on the forgoing, we believe the record is
sufficient to support our determination of the RCCE date for the Black Mesa resource, and we will
not reconsider this issue.
D. Boise City’s Petition to Intervene
We find that granting Boise City’s Petition to Intervene be consistent with the requirements
of Rules 71 through 73, IDAPA 31.01.01.71-31.01.0.73. However, we are skeptical of Boise City’s
claim that its Petition to Intervene was untimely because it was “not aware that decisions regarding
the Clean Energy Your Way program, and specifically the Clean Energy Your Way - Construction
Option would be made in this docket.” Boise City’s Petition to Intervene at 3. Boise City is a party
in Case No. IPC-E-21-40 which concerns the entire suite of CEYW offerings, one of which is the
CEYW – CO program.
A cursory review of the Company’s Application in this case clearly sets forth the
relationship between the Micron ESA within the entire CEYW – CO framework. For example, the
Company stated that the “Micron ESA is consistent with and reflects the regulatory framework set
forth in the Clean Energy Your Way - Construction option, as outlined in Idaho Power’s recent
Application with the Commission (Case No. IPC-E-21-40) to establish new clean energy offerings
for customers under the Clean Energy Your Way Program.” Company’s Application at 3. The
Company goes on to make additional references to the relation of the Micron ESA to the
overarching CEYW – CO program framework.1 The Company’s Application and all pleadings
(except for discovery) are on the Commission’s website at

1 See, e.g., Company’s Application at 5 (“This treatment is fully consistent with the structure outlined in the Clean
Energy Your Way - Construction option in Idaho Power’s Case No. IPC-E-21-40”); and 7 (“Idaho Power completed
a present-value revenue requirement analysis for two scenarios and evaluated the difference in incremental system
resource and power supply cost from Micron’s participation in the CEYW - Construction option . . . . ”).
ORDER NO. 35532 10

https://puc.idaho.gov/case/Details/6826. Either Boise City by possible omission did not review
the Application or did so and chose previously not to intervene after being fully informed of the
Company’s Application in this case. While we do not believe that our order in this case will dictate
the terms and conditions for every future CEYW – CO ESA, the claim that there was no reason to
believe that decisions related to the CEYW – CO program would not be made in this docket are
unfounded.
We are hesitant to grant intervention to a sophisticated party who could have intervened
earlier and participated in this case by propounding discovery, making arguments, and developing
a record and issues for the Commission to consider in its initial final order. Nonetheless, Boise
City is a customer of Idaho Power who has represented it has an interest in the CEYW-CO
program, no party opposed its late intervention in this case and this case involves new issues.
Weighing all factors, the scale tips slightly in favor of granting Boise City’s Petition to Intervene
in this case. Granting Boise City intervention in this case will allow it to access discovery and
additional information which may assuage its concern that certain pricing components under the
Micron ESA will be applied deleteriously to the contracts the Company makes with Boise City
under the CEYW – CO program. Boise City’s input on the matters to be reviewed on
reconsideration will also help to augment the record in this case. Additionally, because we have
granted the Company’s Petition for Reconsideration, we find that no party would be prejudiced by
granting Boise City’s Petition to Intervene.
O R D E R
IT IS HEREBY ORDERED that the Company’s Petition for Clarification and
Reconsideration is granted. The Commission’s directive to the Company in Order No. 35482 to
file an updated Micron ESA and Schedule 26 addressing the Commission’s modifications by
October 30, 2022, is stayed pending a final order on reconsideration in this case setting forth a new
deadline. The Company and Staff shall work together to develop a rate structure for calculating
Micron’s RCC under the ESA which the Company shall file as a compliance filing in this case by
December 13, 2022, or by another date set by Commission order.
IT IS FURTHER ORDERED that the Company’s Petition for Reconsideration is granted.
Staff shall have until October 18, 2022, to file written comments supporting its position on 95%
sharing under the PCA. The Company and Boise City shall have until October 28, 2022, to file
reply comments.
ORDER NO. 35532 11

IT IS FURTHER ORDERED that Boise City’s Petition to Intervene is granted.
IT IS FURTHER ORDERED that Boise City’s Petition for Reconsideration is granted in
part and denied in part. We will not reconsider our decision on the Company’s No-Harm Analysis,
and the calculation of the RCC and the RCCE date. Staff shall have until October 18, 2022, to file
written comments supporting its position on the method for calculating EGCs under the Micron
ESA and 95% sharing under the PCA. Boise City shall have until October 28, 2022, to file reply
comments.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 19th day of
September 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

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JOHN R. HAMMOND JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

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