20220414Comments.pdf

Kelsey Jae (ISB No. 7899)
Law for Conscious Leadership
920 N. Clover Dr.
Boise,ID 83703
Phone: [phone]
[e-mail]
Attorney for the Clean Energy Opporunities of ldaho
IN THE MATTER OF IDAHO )
POWER COMPANY'S )
APPLTCATION FOR AUTHORTTY )
TO TNCREASE rrs RATES FOR )
ELECTRTC SERVTCE TO )
RECOVER COSTS ASSOCTATED )
WITH THE JIM BRIDGER POWER )
PLANT
0i.l
BEFORE TIIE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-2I-I7
CLEAN ENERGY OPPORTUNITIES
FOR IDAHO
COMMENTS
Clean Energy Opportunities for Idaho ('CEO") submits the following comments.
CLEAN ENERGY OPPORTUNITIES FOR IDAHO - COMMENTS
TPC-E.ZL.L7
I
$ Clean Energy Opportunities for ldaho
Apri! 13,2022
Regarding: IPC-E-lL-L7 ln the Matter of the Application of ldaho Power Company for
Authority to lncrease lts Rates for Electric Service to Recover Costs Associated
with the Jim Bridger Power Plant
Subject: lnitial comments of Clean Energy Opportunities for ldaho (CEO)
The news release and bi!! stuffer that ldaho Power (the Company) used to inform customers
concerning the rate changes inherent in their application under IPC-E-ZL-L7 stated in part:
'This filing seeks to accelerate the recovery of depreciation expense by year-end 2030, and
to establish a balancing account to track the incrementa! costs and benefits associated with
ldaho Power's exit from coal-fired operations at Bridger." t
By Commission rule, customer notice should provide, among other things, an explanation of the
utility's need for additional revenue.2 ln IPC-E-21-17, the majority of the costs behind the need
for additional revenue have nothing to do with a reduced useful life of the Jim Bridger coal fired
assets and/or the incrementa! costs likely to be incurred during that remaining useful !ife.
The majority of the need for additional revenues arises from an attempt by the Company to
effectively add the capital expenditures made at Jim Bridger between 2OL2 and 2020 to its rate
base outside of a general rate case. Moreover, within those capital expenditures, the largest
single cost component is related to the historically controversial installation of SCRs on Bridger
units 3 and 4 see
,o6lo3l202L NEWS RELEASE AND CUSTOMER NOT|CE.pDF
, RP 125.01-A
I SCR and other capital expenditures, 0610312027
Rate irueases in tlis dod<et adse pimadly frar d-reovery fq $266 millim d
expendtues ma& between 2012 att2020, td, ptmadly flun aeleratirg
depeciatim frqn 2034 to 2030
-$ in millicrs
Acceleration of 2031-2034
depreciation charges, 49
SCR installation on
Units 3 and 4, 110 Decommissioning
charges,0.6
Several hundred non-
SCR Capital expeditures
made between t/LILZ
andL2l37l20,1S
OOlOgl2021- LARKIN DIRECT.PDF Exhibit 2
ADELMAN DIRECT.PDF Exhibit f 3, 2031-2034 depreclation charges,
5 Glean Energy Opportunities for ldaho
Since the Company's June 3, 2021 news release and bill stuffer distribution the Commission has
notified the public that the review of IPC-E-21-17 matters will cover the prudency of Bridger
capita! expenditures made between 2OLZ and 2020, but even this notice does not mention
SCRs:
YOU ARE FURTHER NOTIFIED thot the Compony hos mode numerous investments to
ensure environmental complionce and routine maintenance ond repair, ld. The Compony
requested a prudence determinotion on incrementol Bridger cool-reloted investments
since the Januory 7, 2072, through December 37, 2020, time-period.2 ld. The Compony
represented thot its investments for environmentol complionce moke up neorly 50
percent of the totol Bridger investments made since Jonuary 7, 2072. ld. ot 5.1
The notice the Company has provided customers misleads through material omissions. And
informing the public via Commission Order provided actual notice to a far smaller group of
ldaho Power customers than the bill stuffer provided.
The effect of such deficient notice is to allow the Company to surreptitiously slip SCR costs into
rate base. That deficient notice should be corrected, particularly given the number of
customers who have previously shown an interest in matters related to the SCR installations.
Ratemakine for SCRs on Bridser units 3 & 4 was a controversial matter
ln IPC-E-13-16 the Company filed for a Certificate of Public Convenience and Necessity (CPCN)
for investment in Selective Catalytic Reduction (SCR) controls in Jim Bridger Units 3 and 4. The
request to grant a CPCN for the installation of SCRs on Bridger units 3 and 4 was contentious.
The Company waited until "the last minute" to file for the CPCN, and requested a very
expedited review process to allow them to make contractual commitments on their required
schedule.
232 public comments were submitted in this very controversia! docket. Representatives of
local businesses filed comments in support of ldaho Power's Application.s The overwhelming
majority of commenters opposed any investment in coal..
The public "SCRS" hearing held on November 25,20L3 in association with case number IPC-E-
13-16 was wellattended and contentious. Before the hearing started ! remember
Commissioner Marsha Smith commenting to staff in the hallway about the drumming and
chanting going on the street outside the Commission offices. More than 110 people were in
attendance at the hearing. A total of twenty-six people testified as to whether the Commission
should grant ldaho Power's request for a CPCN and request for binding ratemaking treatment.
1 Order # 3534O p 3
'Such as: ldaho Association of Commerce and lndustry, Magic Valley Builders Association, Boise Metro
Chamber of Commerce, Lemhi County Economic Development Association, Twin Falls County Board of
Commissioners and the Greater Pocatello Chamber of Commerce Order # 32929, p 8
5 Order # 32929, p 8
1} Glean Energy Opportunities for ldaho
All of those who testified opposed binding ratemaking treatment for ldaho Power's investment
in Bridger Units 3 and 4.2
The Commission moved quickly - the Company's application filing on July 1"t was followed by a
final order issued on December 2"a. ln the end the Commission granted the CPCN but deferred
the day when SCR ratemaking treatment would be reviewed. CEO believes the public should
know that IPC-E-?L-L7 is finally the vehicle for reviewing Bridger units 3 & 4 SCR ratemaking.
And, to date, they have not been effectively so notified.
Notice: openness and transparencv
Notice and transparency have been key issues in other clean power dockets. ln IPC-E-18-15,
after very thorough review and extensive negotiations between parties, the Commission
rejected a Settlement offered by the parties in part for reasons including notice and the public's
associated expectations.E CEO does not believe customers have received the open and
transparent notice in this docket that the Commission has felt needed in other controversial
dockets:
Nothing in the news release and bill stuffers the Company provided was sufficient to
notify the public that IPC-E-21-17 would be the vehicle for reviewing how the Company
would seek a return on, among other things, its investments in Bridger SCRs.
a
a
a
As of alL2l2o22, over 10 months since the docket was initiated, only one public
comment was submitted in IPC-E-?L-L7. Given 232 public comments were submitted
during the Company's original application for rate recovery of the SCR's, the record
demonstrates the public has not been adequately noticed in IPC-E-21-17.
On the contrary the notice provided seems misleading - implying that the rate increase
arises primarily from the accelerated retirement of Bridger assets, not the Company's
opportunity to recover costs associated with expenditures it made at Bridger during the
last decade.
Given the intense public interest shown in the IPC-E-13-16'SCRs" docket, a more adequate
public notice would seem necessary for "complete" notice.
, Order fi 32929, p 9
'"ln summory, the public: 7) expected this docket to result in o study, not o Settlement Agreement; 2)
thought the Settlement Agreement process wos not tronsparent; 3) believed the Settlement Agreement
does not accurotely bolance the costs ond benefits of net metering on the Compony's system and should
be rejected; ond 4) expected, in the interest of fairness, existing customers with on-site generotion be
ollowed to continue on the some progrom they signed up for." ORDER # 34509, p 4
5 Clean Energy Opportunities for tdaho
Both return of and return on capital should be reviewed
ln reviewing any rate changes associated with the Company's expenditures on Bridger units
during the 2012 through 2020 period, the prudency of the expenditure as well as any return on
those expenditures both need reasonable treatment.e ln his supplemental direct testimony,
Mr. Larkin observed that the extensive detail provided in Mr. Adelman's direct testimony
Exhibit 3 was designed to address the prudency of the expenditures:
"the intent of the exhibit which is to support a prudence review by providing detailed
project descriptions and justification for the investments necessary to operate the Bridger
plant in a safe, efficient, and reliable manner, including investments to ensure
environ mental compliance",o
But the fairness and reasonableness of earning a7.86Yo return on the 2Ot2-2020 and other
expenditures is never discussed. Rather, a7.86% return is just noted as the return percentage
used in calculating both the direct and supplemental direct testimony Mr. Larkin provided. ',
Source: US Department of the Treasury
At minimum, given the absence of notice or justification for increasing rates to cover the
Company's proposed profits on the SCR expenditures and the substantial changes in the overall
interest rate levels that have occurred since the last rate case, CEO opposes the issuance of an
order in this docket authorizing the Company to earn a return at a rate of 7.86% on the SCR
expenditures.
e ln determining proposed ratemaking treatments, the commission shall maintain a fair, just and reasonable
balance of interests between the requesting utility and the utility's ratepayers. per ldaho Code 5 51-541(4)
IO O2IL6I2O22 LARKIN SUPPLEMENTAL DIRECT.PDF P 14
tt 02lL5l2O22 LARKIN SUPPLEMENTAL DIRECf.PDF, Exhibit 2
lnterest ratesurcrc mrdr higherin 2011 than in 2021 when lEE21-17 uvasfiled.
Ratesof retumthatvrercfairandreasonablein20ll rnybeinapprcprhtelyhighin202l.
oP(!L
=o'=
L(!
CL
=3EFo
ODl!
0)
(!
to5c
L
4
3
2
1
0 I-
1Y3 irlo 2Y 5V
T-bilU bond yield by Mattrity
.20LL .202t
t0Y 30 \t
5 Glean Energy Opportunities for ldaho
CEO believes the notice provided to customers that this docket would affect the rate basing of
expenditures on the Bridger SCRs has been inadequate. Considering how contentious the
original SCR CPCN decision was, the notice provided to customers to date seems inadequate.
More importantly, this record seems totally inadequate to make a determination as to whether
the proposed rate of return of 7.86Yo is fair, just, reasonable, and in the public interest.
Decisions regarding the prudency of prior expenditures on the Bridger units and what return
the Company deserves on those investments seem more appropriate for inclusion in a genera!
rate case. At the least, a re-noticing to all customers is warranted to explain that additiona!
revenue is proposed to compensate IPC for, among other things, the expenditures and7.86%
return on investment associated with the SCRs.
Respectfully submitted,
Michael Heckler, Policy Director
Clean Energy Opportunities for ldaho
CERTIFICATE OF SERVICE
I hereby certify that on this l4th day of Apnl, 2022,1delivered tue and correct copies of
the foregoing PETITION TO INTERVENE to the following persons via the method of service
noted:
Elecuonic Mail Delivery (See OrderNo. 34602)
Idaho Public Utilities Commission
Jan Noriyuki
Commission Secrctary
[e-mail]. gov
Idaho PUC Staff
Chris Burden
Deputy Auomey General
Idaho Public Utilities Commission
chris.burdin@puc. idaho. gov
Idaho Power Company
Lisa D. Nordstom
Mau Larkin
Idaho Power Company
1221 West ldaho Steet, 83702
P.O. Box 70 Boise, tdaho 83707
lnord strom@ idahop ower. com
dockets@ idahop ow er. com
mlarkin @ idahopow er.eeno
Boise City
Ed Jewell
Deputy City Afiorney
Boise City Attorney's Office
150 N. Capitol Blvd. I P.O. Box 500
Boise, Idaho 83701-0500
B oiseC ityA ttomey@citvofboise. ore
eiewell@citvofboise. orq
Idaho Conservation League
Benjamin J. Otto
710 N. 6th St. Boise,Idaho 83702
botto@ idahoconservation. org
Industiol Customers of ldaho Power
Peter J. Richardson
Richardson Adams, PLLC
515 N. 27th St, P.O. Box 7218
Boise,Idaho 83702
peter@richardsonadams. com
Dr. Don Reading
6070 Hill Road Boise, Idaho 83703
dreading@mindsprine. com
Micrcn Technology,Inc.
Jim Swier
8000 Souttr Federal Way
Boise,ID 83707
[e-mail]
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart, LLP
555 17th Sreet Suite 3200
Denve4 CO 80202
darueschhof f @ hollandhart. com
tnelso n @ ho llan dh art. co m
aw [e-mail]
CLEAN ENERGY OPPORTUNITIES FOR IDAHO . COMMENTS
IPC-E-ZL-L7
2
adee@hollandhartcom
elgarsanoamari@hollandhart com
SietraClub
Rose l\flonahan
AnaBoyd
2101Webeter SEeeU Sufte 1300
Oaldan4 Galifomia Lz
rose. monatran@ sierraclub. org
ana.bovd@ sienadub. ore
IS\&U
Kelsey Jae
Awmeypr CEO
CLEAN ENERGY OPPORIUNITIES FOR IDAIIO . COMMENTS
IPC-E-21-17
3