20220516Reply Comments.pdf

Rose Monahan (CA 329861) (Pro Hac Vice)
Sierra Club Environmental Law Prograrn
2101 Webster Street, Suite 1300
Oaklan4 CA946l2
(4ts)e77-s7M
rose. monahan@sierraclub. org
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO INCREASE ITS RATES
FOR ELECTRIC SERVICE TO RECOVER
COSTS ASSOCIATED WITH THE JIM
BRIDGER POWER PLANT
;irililvilD
iii':? r:;.Y i 5 $.?,i 9: h0
)) CASENO. TPC-E-21-I7
)
) JOINT REPLY COMMENTS OF
) IDAHO CONSERVATION LEAGUE
) AND SIERRA CLUB
)
nrirl,iiss
Attornqt for Sierra Club
Benjamin J. Otto (ISB No. 8292)
710 N 6ft Street
Boise,ID 83701
Ph: [phone] x 12
Fax: [phone]
botto @idahoconservation. org
Attornqtfor the Idaho Conservation League
BEFORE IDAIIO PTIBLIC UTILITIES COMIVISSION
Idaho Conservation League ("[CL") and Sierra Club respectfully submit the following
reply comments in the above captioned matter in order to highlight the broad agreement arnongst
the commenting parties on a number of issues.
First, both Staffand Boise Citynoted, as did ICL and Sierra Club, the importance of
Idaho Power Company ("Idaho Power" or "Company'') securing a firm exit date from Jim
Bridger. In fact, Commission Staffrecommended that the Commission "[r]eject the Company's
request to change rates at this time[,]" in part, because "ldaho Power does not have an agreement
with its operating partner to exit [Jim Bridger] early."r ln a similar vein, Boise City
recommended that Idaho Power "immediately begin work to negotiate oon or before' closure
dates with PacifiCorp."2 and further noted that "establishing exit date parameters when
approving ratemaking treatment provides clear expectations for the medium-term and is a good
practice that furthers ratepayer interests by providing rate certainty and stability."3 These
comments reinforce ICL and Sierra Club's position, namely that the Commission should not
guarantee Idaho Power accelerated rate recovery if the Company cannot guarantee that it will
accelerate its exit from Jim Bridger.
Importantly, the point here is not to dissuade Idaho Power from exiting Jim Bridger. As
noted by Industrial Customers of Idaho Power ("ICIP-), Idaho Power is engaged in "laudable
efforts to respond to the deteriorating economics of maintaining a coal fired generation fleet."4
Rather, the Commission should incentivize Idaho Power to secure a firm, enforceable exit
agreement with PacifiCorp as quickly as possible by making clear that Idaho Power will not be
granted rate recovery on its investments in Jim Bridger until it can guarantee the promised
customer benefits of early exit from the plant. As ICL and Sierra Club recommended, any final
order in this proceeding should be explicitly conditioned upon Idatro Power securing a firm exit
plan with PacifiCorp. ICL and Sierra Club further support Staff s recommendation that no
changes to rates be implemented prior to securing that agreement.
Second, many parties noted the potential rate impact of Idaho Power's request and
encouraged the Company to evaluate lower cost financing options, including securitization. For
I Commission Staff Opening Comments at 12, ll.
2 Boise City Opening Comments at 3.
3 Id.4Industrial Customers of Idaho Power Opening Comments at 2.Idaho Power's efforts to exit Jim Bridger and
transition to a clean energy fleet was similarly supported by Micron Technology, Inc. See Micron Technology, Inc.
Opening Comments at 2.
instance, Boise City noted that although "the Company proposes to generally follow the
procedure for early retirement and financial treatment of the Valmy Plant, it is important to
recognize the proposed accelerated depreciation schedule for the Bridger Plant results in an
annual rate increase that is more than twenty times greater than resulted from the accelerated
depreciation of the Valmy Plant."s ICIP also noted that Idaho Power's current application has
been "pancaked" with Idaho Power's most recently filed annual PCA rate case, which similarly
seeks to significantly increase retail rates.6 Both of these parties recommended that Idaho Power
evaluate and potentially pursue securitization of its remaining debt on the Jim Bridger plant as a
viable financing option that would reduce customer costs.T As ICIP pointed out, secwitization
may be appropriate for Idaho Power because the Company is currently holding too much equity
and securitizationis unlikely to negatively impact Idaho Power's earning levels.8 ICL and Sierra
Club's comments included analysis showing that Idaho Power could save customers at least
$63.7 million if the Company pursued securitization.e This level of savings should prompt the
Company to fully evaluate securitization and explain why accelerated depreciation is preferable
to securitization.
Finally, both Clean Energy Opportunities for Idaho ("CEO") and Boise City stressed the
importance of carefully considering the prudency of Idaho Power's prior investrnents in Jim
Bridger.l0 CEO's comments specifically noted the controversy surrounding Idaho Power's
5 Boise City Opening Comments at 2.
6 ICP Opening Comments at 2.
7 Boise City Opening Comments at 4; ICIP Opening Comments at 2-5.
E ICF Opening Comments at 4-5.
e See ICUSierra Club Joint Opening Comments at32-35; ICUSierra Club Attach. 9.
r0 Clean Energy Opportunities for Idaho Opening Comments at PDF p. 5 (urging the Commission to evaluate not
only Idaho Power's return o/its expenditures on SCRs at Jim Bridger but also its retum or those expenditures).
Boise City Opening Comments at 2 ("Boise City believes the prudency determination is a critical part of this
proceeding and recognizes the need to assess both the individual expenses incurred at the Bridger Plant and the
system ofcontrols in place between the Company and the plant co-owner, PacifiCorp, to ensure any costs approved
here are reasonable.").
decision to install selective catalytic reduction ("SCR") pollution controls at Jim Bridger Units 3
and 4 and the lack of clear notice to the public that those costs could now be potentially put into
rates.lr ICL and Sierra Club agree that this Commission should carefully scrutinize Idaho
Power's past expenditures, particularly its investment in SCRs at Jim Bridger. As ICL and Sierra
Club's opening comments showed, the SCR decision was imprudent at the time it was made. As
a remedy, ICL and Sierra Club continue to recommend that this Commission deny Idaho Power
any return on its investment, which is similarly supported by CEO.12
ln conclusion, it is clear from the parties' comments that the Commission should take the
following actions on Idaho Power's current application:
1. Deny any rate recovery until Idaho Power has secured a firm exit agreement with
PacifiCorp allowing for Idaho Power's early exit from the Jim Bridger plant;
2. Direct Idaho Power to explain why it is not pursuing securitization of past, prudently
incurred expenditures at Jim Bridger;
3. Carefully scrutinize Idaho Power's past investments in Jim Bridger, and ultimately find
that the SCR investnent was imprudent.
Dated: May 13,2022
Respectfu lly submitted,
18-f\'\,rr^^hr^-
Rose Monahan (CA Bar No. 329861)
Sierra Club
F^ a*-
Benjamin Otto (ID BarNo. 8292)
Idaho Conservation League
rr Clean Energy Opportunities for Idaho Opening Comments at PDF pp.2-4.
t2 Id. at PDF p. 6 (noting that any decision on a return on investment for the SCRs should be made in a general rate
case).
CERTIFICATE OF SERVICE
I hereby certi$/ that on this 13ft day of May 2022,I delivered true and correct copies of
the foregoing JOINT REPLY COMMENTS OF SIERRA CLUB AND IDAHO
CONSERVATION LEAGIIE to the following persons viathe method of service indicated
below.
Electronic mail only (see Order 35375)
Idaho Public Utilities Commtssion
JanNoriyuki, Secretary
secretary@puc. idaho. gov
Commission Staff
Chris Burdin
chris.burdin@puc. idaho. eov
Idaho Power Company
Lisa D. Nordstrom
Matt Larkin
lnordstrom@idahopower. com
mlarkin@ idahopower. com
dockets@idahopower. com
Industrial Customers of ldaho Power
Peter J. Richardson
Richardson Adams, PLLC
peter@richardsonadams. com
Dr. Don Reading
dreadine@mindsprins. com
Idaho Cons ervation League
Be4iamin J. Otto
botto@idahoconservation. ore
City of Boise
Ed Jewell
Boisd itvAttorney@citvofboise. ore
ej ewell@cityofboise. org
Clean Energt Opportunities for ldaho
Michael Heckler
Courbrey White
mike@ cleanenereyopportunities. com
courtney@ cleanenersyopportunities. com
Kelsey Jae
[e-mail]
Micron Technologt, Inc:
Jim Swier
[e-mail]
Austin Rueschhoff
ThorvaldA. Nelson
Austin W. Jensen
darueschhoff@ hollandhart. com
trelson@hollandhart. com
awj ensen@.hollandhart. com
[e-mail]
sl garganoamari@hollandhart. com
/s/ Rose
Rose Monahan
Sierra Club Environmental Law Program
2101 Webster St., Suite 1300
Oakland, CA946l2
Phone: [phone]
rose.monahan@sierraclub. org