20220906Reply Comments on Reconsideration.pdf

Peter J. Richardson ISB # 3195
RICHARDSON ADAMS, PLLC
515 N. 27tl' Street
Boise, Idaho 83702
Telephone: [phone] I
[e-mail]
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR AUTHORITY TO
ESTABLISH A NEW SCHEDULE TO
SERVE SPECULATIVE HIGH-DENSTTY
LOAD CUSTOMERS
CASE NO. IPC-E-21.37
GEOBITMINE'S REPLY
COMMENTS ON
RECONSIDERATION
-.. : :,:' T' ,'.'., I r i,.r':L
Attorneys for GeoBitmine LLC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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COMES NOW, Petitioner CeoBitmine LLC, by and through its undersigned attorney
and provides this Commission with its Reply Comments to the Comments on Reconsideration
filed by the ldaho Power Company ("ldaho Power" or the "Power Company") and the Staff of
the ldaho Public Utilities Commission ("Skff').
I
ORDER ON RECONSIDERATION IS EXPANSIVE
ln its order granting reconsideration, the Commission did not home in on any particular
issue raised by GeoBitmine in its Petition for Reconsideration, rather the Commission is
apparently entertaining reconsideration of all of the issues raised by GeoBitmine. In its order
granting reconsideration, the Commission declared:
CeoBitmine states that "the existing 'evidentiary record' ... as well as the applicable law
requires that the Commission modify Order No. 35428 by denying [the Company's]
Application for approval of Schedule 20." Petition at 19. The Commission finds that
GEOBITMINE LLC REPLY COMMENTS ON RECONSIDERATION
CASE NO. IPC.E.2I.37 PAGE I
additional consideration of these issues raised in GeoBitmine's Petition and the record is
appropriate.l
The Commission's reference to "these issues raised in GeoBitmine's Petition and the record"
plainly refers to all of the issues raised in GeoBitmine's Petition with an apparent focus on the
adequacy of the evidentiary record. Pursuant to Commission Rule 3312 and Idaho Code Section
6l-626, GeoBitmine observed both evidentiary and legal flaws in the Commission's order and
asserted that the Commission's order is 'unreasonable, unlawful, erroneous or not in conformity
with the law'. Furtherrnore! as explained herein, neither the Power Company's nor the Staffs
Comments on Reconsideration have effectively rebutted any of GeoBitmine's legal or
evidentiary arguments,
II
THE 'NO.HARM, NO-FOUL' METHOD OF RATEMAKING IS INHERENTLY
UNREASONABLE AND VIOLATES THE COMMISSION'S OBLIGATION TO SET
FAIR, JUST AND REASONABLE RATES
The first broad category of legal flaws identified in CeoBitmine's Petition is entitled
"Schedule 20 Practical Problems" which explains why the Company's Schedule 20 is both
unreasonable and unduly discriminatory and hence not in conformity with the law. The initial
practical problem deals with "Continuity of Service" which refers to the intemrptability
provisions of Schedule 20. GeoBitmine made the following unrebutted assertion in its Petition
However, one of the primary provisions in Schedule 20 allows ldaho Power to, at its
discretion, call "intemrption Events" for tp to 225 hours a year. An Intemrption Event
results in the Customers' facility literally going'dark.' ... Intemrption Events can occur
at any time during the aftemoon and evenings in the summer months for up to ten hours
at any time ldaho Power, in the exercise of its discretion, chooses to trigger such an
event.3
I Order No. 35488 ("Reconsideration OrdeC') at p. 9. Ellipses and brackets are in the original text.
2 toAPt 3r.ol.ol.33l
I CeoBitmine Petition at p. 5. Emphasis in the original text.
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CASE NO. IPC-E-2I.37 PAGE 2
GeoBitmine also made the following unrebutted assertion in its Petition:
the very threat (or potential) of loss of electricity renders it impossible to secure
financing or investment in GeoBitmine's proposed Aberdeen, Idaho operations. ...
Reliability and continuity of service consistent with the levels of reliability and continuity
of service ldaho Power offers its other customers is critically important to GeoBitmine
LLC..,.4
Neither ldaho Power nor the PUC Staffhave rebutted in their Comments on Reconsideration (or
even attempted to rebut) GeoBitmine's factual assertions as to the detrimental impact ldaho
Power's Schedule 20 intemrptability provisions will have on its proposed operations in ldaho
In addressing the question of mandatory non-compensated intemrptability in its final
order, the Commission provided ldaho Power with the following instructions:
,we
encourage the Company to continue to evaluate assumptions regarding the risks and nced
for mandatory intemrptible service, the need for non-interruptible service through special
contracts or other options for customers with loads below l0 MW, and thc need for
marginal cost-based rates. Before it develops and files its next general rate case, we
direct the Company to evaluate and compare other methods for determining a marginal
cost of energy in addition to the use of ACA in the IRP for setting the Schedule 20 energy
rate. We further direct the Company...6
The Commission based its decision approving Schedule 20 on the mistaken belief that because
"there are no customers currently seeking service under Schedule 20" that the Company could
leisurely "evaluate assumptions regarding the risks and need for mandatory intemrptible
senr'ice." The Commission was wrong. There was a customer, GeoBitmine, seeking service
under Schedule 20. Idaho Power was aware of that fact and made no attempt to correct the
Commission's mistaken understanding of the erroneous fact upon which it based its decision.T
4 ld.at pp. 4 - 5.
s The word, "while" is, of course, defined as'a period of time'or'during the period of time.' Sce Webster's ll New
Riverside University Dictionary. Houghton Muffin publisher, 1988 at p. 1314.
6 C)rder No, 34528 at p.7 . Emphasis provided.
7 Although CeoBitmine was seeking scrvicc that would typically havc bccn provided under Schcdule 19, ldaho
Power was insistent that Schedule 20 was the applicable schedule.
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CASE NO. IPC-E.2I-37 PAGE 3
The Commission's declared premise for its decision allowing non-compensated and
mandatory intemrptions under Schedule 20 was that were "no customers currently seeking
service" under that schedule. The only rationale for such an extra-legal justification is a
supposition that no harm will be suffered in the approval of an illegal and flawed tariff since
there are no potentially affected customers seeking service under that tariff - sort of a 'no-harm
no-foul' approach to utility ratemaking. Believing there were no customers seeking service
under Schedule 20 the Commission "directed" the Company to l"while there are no cuslomers"f
"evaluate the risks and the need for mandatory intemrptions." Of course, ordering the Company
and the Staff to evaluate of "the risks and the need for mandatory intemrptions" is a defacto
finding that the tariff s interruption provisions have not been vetted and hence cannot be found to
be fair, just or reasonable, which findings are prerequisite to the Schedule's approval. Simply
put, the Commission was not convinced that Schedule 20's intemrption provisions are either
needed or cost justified.
Although the Commission's final order approved Schedule 20 "as filed,"8 the
Commission never made any findings that mandatory intemrptions are reasonable or fair or just
or in conformity with the law. Rather the Commission conditioned approval of Schedule 20
explicitly on a requirement that Idaho Power conduct further studies and research and come back
to the Commission at a later date with evidence supporting the mandatory interpretability
provisions of Schedule 20; to wit:
We further direct the Company to collaborate with Staff after the Company evaluates cost
assignments based on usage characteristic and system requirements under Schedule 20
and then assign cost and benefits incorporating intemrption requirement parameters.e
8 Order No. 34528 at p. 6.
e Order No. 35428 at p. 7.
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The Commission made no finding as to the reasonableness of the mandatory interruption
provisions in Schedule 20. lt did just the opposite. The Commission ruled that the "cost and
benefits" and the 'orisks and need" of the intemrptability provisions in Schedule 20 were
unknown because they needed to be "evaluated" and "assigned" after "collaboration" among the
Company and the Staff. The Commission's approval of Schedule 20 was not based on a finding
that its provisions were reasonable. The opposite is true. The Commission based its approval of
Schedule 20 based on the premise that "there are no customers currently seeking service" under
that Schedule. Schedule 20 was approved as nothing more than a strawman or placeholder that
ldaho Power and the Staff were ordered to complete and flesh out after they had an opportunity
to "collaborate ... fandJ evaluate ... cost assignments based on usage characteristic and system
requirements under Schedule 20 and then assign cost and beneJit.s incorporating interruption
requirement parameters." to
GeoBitmine's experience proves the point. GeoBitmine was (and remains) amenable to
some limited service intemrptability provisions. However, the parameters and costs for such
intemrptible service must be accounted for and must be manageable by the customer. Here,
Idaho Power's Schedule 20 is imposed in an arbitrary, unilateral manner with no consideration as
to the impact of such intemrptions on the customer's operations. Idaho Power's Schedule 20
does not contemplate customer input as to timing, duration or compensation for granting the
power company the privilege of terminating/interrupting continuity of service - all of which
amply demonstrates the unreasonable nature of the Company's Schedule 20. All of which also
amply illustrates the reason the Commission never specifically approved the interruption
ro Id
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CASE NO. IPC-E-2I-37 PAGE 5
provisions in the tariffand instead ordered ldaho Power back to the drawingboard as to the
"risks" and the "benefits" of those intemrption provisions.
In sum, the Commission's approval of Schedule 20 was not based on any finding that its
central terms and conditions (intemlption provisions and marginal energy pricing provisions) are
fair, just or reasonable. Rather the Commission's approval was simply based on the mistaken
finding that because no customers are affected, the Company and Staff can take their time to
"collaborate" in order attempt to make a showing of the schedule's reasonableness at some
unspecified date in the future.
Since no customers are affected, apparently the Commission believed that it could just
skip the requirements in ldaho Code Section 6l-301 which provides:
All charges made, demanded or received by any public utility . . .shall be just and
reasonable. Every unjust or unreasonable charge made, demanded or received for such
product or commodity or service is hereby prohibited and declared unlawful.
Here, of course the Commission has ordered tdaho Power to begin its research, in collaboration
with Staff as to the "risks and need" and the "costs and benefits" of the rates in Schedule 20. Of
course, until the risks, need, costs and benefits of Schedule 20 areknown, the Commission is
unable to make any finding that is supported in the record as to whether such rates are fair, just
and reasonable and hence whether they are legal.
III
IDAHO POWER'S ARGUMENT THAT SCHEDULE 2O'S INTERRUPTION
PROVISIONS ARE COMMON IS WRONG
GeoBitmine objected to the Company's Schedule 20 intemrptability provisions because
they are unworkable from a practicable standpoint and thus "unreasonable" in the legal sense of
the word. GeoBitmine also objected because the intemrptible provisions of the tariff are
discriminatory, stating that "ldaho Power's Schedule 20 grants preferential [to wit: illegally
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CASE NO. IPC-E-2I-37 PAGE 6
discriminatory] treatment to all of tdaho Power's other ratepayers (including Schedule l9
ratepayers) by . . .forcing just Schedule 20 ratepayers to suffer draconian intemrptability
provisions that are not also imposed on any other ratepayer class on Idaho Power's system."ll
Idaho Power's response to GeoBitmine's assertion that the mandatory uncompensated
intemrptible provisions in Schedule 20 are discriminatory and unreasonable was to misleadingly
claim that "intemrptible rates are commonplace in utility regulation."l2 [daho Power missed the
point entirely. GeoBitmine doesn't complain of intemrptible rates, because Schedule 20 does
not proffer interruptible rates. Schedule 20 provides for unilateral intemrptible SERVICE to be
imposed without regard for the customer's needs and at the utility's whim --- all without
compensation (e.g. no rates) to the Schedule 20 customer. Contrary to Idaho Power's apparent
misunderstanding of its own tariff there simply is no intemrptible rate - only intemrptible
service with no corresponding rate or compensation. The implication asserted by ldaho Power's
response is that Schedule 20-style intemrptible provisions (e.9. non-compensated unilaterally
imposed intemrptions) are commonplace in utility regulation. They are not. In fact research
reveals that, outside of the Commission's approval of Idaho Power's Application, Schedule-20
style intemrptible provisionsr3 do not exist and ncvcr have existed in the State of Idaho for any
of this Commission's regulated electric utilities.la In addition, GeoBitmineos rescarch failcd to
uncovcr any such instance for non-regulated electric utilities operating in the State of ldaho
either.
lt GeoBitmine Petition al p. 12. Bracketed material provided. Parenthetical in original.
12 tdaho Power's Comments on Reconsideration at p. 8.ll To wit: mandatory, non-compensated, unilateral interruptions at the complete discretion of the utility.
la GeoBitmine's counsel has been unable to identify any such tariffprovision in his research of historic ldaho IPUC
caselawandorders. TheprovisionsofldahoCode6l-53l,dealingwiththecurtailmentofelectricandorgas
service in the event ofan emergency are not applicable to this discussion and have not been included in our analysis.
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CASE NO. IPC-E-2I.37 PAGE 7
In support of its assertion that intemrptible service is "not uncommon," the Company
cites to a press release from a North Dakota utility and to a Wyoming utility's "pilot" tariff
According to Idaho Power:
Finally, beyond demand response, intemrptible service is not uncommon. Several
utilities offer intemrptible rates, with somc specifically tailored for cryptocurrency
mining operations such as Black Hills Energy and Rocky Mountain Power in
Wyoming.r5
Idaho Power did not offer to enter either the referenced Black Hills press release or the Wyoming
tariff into the record. Idaho Power's argument leaves the Commission with the impression that
the Black Hills and Wyoming intemrption programs/tariffs are comparable to Schedule 20. They
are not. Even a cursory examination of the two interruptible rate examples ldaho Power offered
contradicts the false impression that the Black Hills and Wyoming tariffs are comparable to
Idaho Power's Schedule 20. They are not comparable because both the Black Hills and
Wyoming programs are voluntary and both programs provide compensation to the customer.
These are two critically significant distinctions which makes ldaho Power's use of these
professed examples of simi larity inappropriate.
Furthermore, the Wyoming "pilot" tariff pays customers who choose to enroll twenty
cents per kWh for each kWh of intemrpted energy and one dollar for each kw of on-peak
intemrpted demand.16 Here, on the other hand, Idaho Power apparently plans to abscond with
the financial benefits it will reap for interrupting Schedule 20 customers - either for the benefit
of its ratepayers or its shareholders. Regardless of how one follows the money -- Schedule 20
r5 ldaho Power Answer to CeoBitmine's Petition for Reconsideration at p. I l. Footnotes omitted.
r6 A copy of the Rocky Mountain Power's Wyoming Tariff - Original Sheet No. 30- I P.S.C. Wyoming No. I 7
Interruptible Service Pilot Schedule 30 is attachcd hereto
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CASE NO. IPC-E-2I-37 PAGE 8
customers who are interrupted will have been fleeced to benefit the power company and/or its
ratepayers.
Idaho Power claims that the Wyoming "pilot" tariff was "specifically tailored for
cryptocurrency mining operations."lT How that tariff has been specificatly "tailored for
cryptocurrency mining operations" is unclear. Its applicability section provides that it is
available to anv industrial customer on Rocky Mountains system in Wyoming. In addition, there
is no penalty for a Wyoming Schedule 30 industrial customer's failure to curtail when called
upon to do so -- other than a mere forfeiture of the proffered credits for actual curtailment. A
copy of Rocky Mountain Power's Wyoming TariffSchedule - Original Sheet No. 30-1, P.S.C.
Wyoming No. l7 Interruptible Service Pilot Schedule 30 is attached hereto as Exhibit No. l. The
Commission is respectfully requested to take official notice of the referenced tariffschedule
pursuant to Rule of Procedure No. 263(l)(a) and enter the same into the record of this
proceeding upon which findings may be made.
Idaho Power's reference to Black Hills EnergylE as another purported example of the
"commonplace" nature of intemrptible service for cryptomining companies is more difficult to
parse. The citation to this reference at footnote 32 in its Answer is actually just a reference to a
short press release with few specific details about thc Black Hills tariff or schedule. Regardless,
however, it is clear from reading the referenced press release that the Black Hills program is
voluntary, and not mandatory as is ldaho Power's Schedule 20. lt also appears that participants
in the Black Hills program are compensated for their interruptible qualities - again unlike ldaho
Power's Schedule 20. Thus, the Black Hills Energy program is, like the Wyoming tariff,
r7 ldaho Power Answer to GeoBitmine's Petition for Reconsideration at page I l.
18 Idaho Power's Comments at p. 8. fn. I I referencing ldaho Power's Answer at p. I I
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substantially and materially different from ldaho Power's Schedule 20 defeating Idaho Power's
attempt at a favorable comparison of the two programs.
Finally, in support of its assertion that intemrptible service and rates are "commonplace,'
Idaho Power cited the electric utility industry's response to recent heat wave events in Texas.
The Power Company noted that:
Due to projected strains on the power grid from a heat wave, the Electric Reliability
Council of Texas requested curtailment from Bitcoin miners, "rryho are required to turn
off their machines when the state faced energy shortages."le
ldaho Power's Answer to GeoBitmine's Petition for Reconsideration cited to just a newspaper
article to support its assertion that the situation in Texas is analogous to its Schedule 20
offering.20 Unfortunately, the article ldaho Power cited is protected from general viewing and is
only available to subscribers of the indicated publication. Because GeoBitmine's counsel is not
a subscriber to the publication cited, counsel was unable to access the article. Nevertheless, the
assertion in tdaho Power's quoted passage that "Bitcoin miners, "... are required to tum offtheir
machines when the state faced energy shortages" is just part of the story. Other,
contemporaneous news articles, reporting on the Texas heat wave curtailments observed that
bitcoin mining curtailmcnts are voluntary and, equally important, that the bitcoin mining industry
was compensated for their voluntary curtailments. For instance, the following is indicative of the
press accounts of the bitcoin industry's response to the Texas heat wave:
The Elcctric Reliabilitv Council of T'exas, or ERCOT, wl'tich manages the state's power
supply, urged virtually all bitcoin mining to shut down during periods of peak electricity
demand in a bid to protect the grid, reports Bloonrbers News. Some forms of
re ld.
:0 ldaho Power's Answer at lootnote 34.
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cryptocurrency mining, done witlr powerful computers, rely on fossil fuel energy that
worsen the climate crisis.
Most of the paused Texas crypto mining operations entered an arrangement with ERCOT
that provides robust financial incentives, meaning the companies were basically paid by
Texas energy ratepayers to temporarily stop operations.
According to a spokesperson for Texas Blockchain Council, the move freed up morc than
1,000 megawatts of electricity that can now be used for residents and businesses.2l
Again, the assertion by Idaho Power that cryptomining operations are commonly subjccted to
Schedule 20-like service intemrptions is simply wrong. All three instances cited by the Power
Company demonstrate that such intemrptions are all voluntary, and the cryptomining entities that
voluntarily agree to curtailment are all compensated, indeed compensated with what some have
labeled as "robust financial incentives."22
In short, Idaho Power has actually demonstrated (albeit without offering any direct
evidence into the record) that voluntarv intemrptible rate tariffs for which compensation is paid
by the utility in exchange for curtailments may be, in fact, commonplace. What ldaho Power
purported, but failed, to do is to identify a single utility that imposes Schedule 20-style
mandatory intemrptible service for which no compensation is made. None of the examples cited
in [daho Powerns Answer or in its Reply are remotely similar to Schedule 20, which is apparently
an anomaly in the utility industry.
ry
THERE IS STILL NO EVIDENTIARY RECORD UPON WHICH
THE COMMISSION MAY MAKING FINDINGS
ln its Petition for Reconsideration, GeoBitmine observed that the Commission's initial
order was not supported by an evidentiary record:
2r The Environmental Working Group: https://www.ewg.orei ncrvs-insitshts/news-rclcasc/2022/0?/bid-llotect-statcs-
Irorvcr-qrid-collapsc-cncrsEsapping-tcxas Emphasis in the original text.
22 Id.
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The lack of a record belies the Commission's cursory "finding" that it is "fair, just and
reasonable to approve the Company's Application" or that the Company's Application is
a "reasonable approach." There is simply no substantial evidence (indeed, no evidence of
any nature whatsoever) supporting the Commission's order, no evidence to support such
findings that could be made on reconsideration, and certainly no rational connection
between the available facts and the Commission's decision.2s
GeoBitrnine also pointed out that:
Not only is thcre no substantial competent evidence supporting the creation of a new
class of customers, there simply is no evidence whatsoever. No party to the case (Idaho
Powcr includcd) presented testimony or affrdavits in support of their positions. The
'recordo is composed of unverified comments that have not been subject to examination,
and what materials that do exist only serve to confirm that no cost-of-service study was
performed.2a
The Commission, in response, made the finding that
[R]econsidering Order No. 35428 by written comments, associated documents, and
affidavits in support of the comments is reasonable.2s
Comments were filed by tdaho Power and the PUC Staff. Neither entity, however, provided any
associated documents or affidavits in support of their comments. Comments, unsupported by
evidence are - just comments. The Commission is constrained to make its findings based on
substantial competent evidence in the record. The Idaho Supreme Court makes clear that:
the findings of the commission must be based upon substantial evidence; its findings not
thus supported, or which are contrary to the evidence, cannot be accepted by the court as
a basis for upholding the conclusions of the commission. Const. Art.2, $ l; Idaho Power
& Light Co. v. Blomquist, 26 Idaho 222,141P. 1083; Nez Perce Roller Mills of
Lewiston v. Public Utilities Comm.,54 tdaho 696,34P.2d972; Mountain View Rural
Tel. Co. v. Interstate Tel. Co,, 55 [daho 514, 46 P.2d 723; State ex rel. Taylor v. Union
Pac. R. Co.,60 ldaho 185, 89 P.2d 1005; Application of Nichols,68 ldaho 490, 199 P.2d
255; Application of Lewiston Grain Growers,69 ldaho 374,207 P.2d 1028; Application
of Pacific Tel. & Tel. Co., 7l Idaho 476,233 P.2d 1024.
r1 GeoBitmine Petition for Reconsideration at p. 18.
14 ld.
rs Order No. 35488 at p. 9.
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Applications oJ'lntermountain Gas Co.,77ldaho 188,202,289 P. 933,942 (ldaho 1955), The
Commission's final order fails this fundamental test because ldaho Power failed to offer any, let
alone substantial, evidence in support of the adoption of Schedule 20.
ldaho Power addresses the alleged need for Schedule 20 in Sections I[ and III (pages 4 -
l3) of its Comments on Reconsideration. The Power Company's argument is that cryptomining
operations are the "primary example" of a customer-type for which Schedule 20 is designed.26
Proving this assertion is central to Idaho Power's case, for unless it can show that bitcoinmining
operations pose unique cost-causing or operational problems, then the need for Schedule 20
evaporates. Idaho Power spends I I pages of its l3-page brief on this central issue. [n those I I
critical pages ldaho Power cites or references to the following categories of legal and factual
support:
Orders in this Docket:
Discovery in this Docket:
Its own Tariff
Other Party Pleadings
Its own Pleadings
Newspaper2T Articles
Legal Authorities
Affidavits
Testimony
Officially Noticed Docs
I citation
I citation (arguing the response should not be considered)
I citation
2 citations
4 citations
l9 citations
no citations
no citations
no citations
no citations
The only independent 'factual' support for the Company's position is found in the 19 newspaper
articles it references. Newspaper articles are "classic, inadmissible hearsay.'t Roberts v- City oJ'
Shreveport, 397 F.3d 287,295 (5th Cir. 2005); see The Barnes Foundation v. Township of Lower
Merion, 242 F.3d I 5 l, 166 n.8 (3d Cir. 2001); Miller v. Tony & Susan Alamo Found., 924 F.2d
143,146 (8th Cir. 1991); Pennington v. Vistron Corp., 876F.2d414,427 n.l5 (5th Cir
16 ldaho Power Reply Comments at p. 4.
?7 Including magazines, newspapers, blogs, trade publications, television news networks, etc.
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CASE NO. IPC.E-2I.37 PAGE I3
1989); Dullas County v. Commercial Union Assur. Co.,286 F.2d 388, 392 (5th Cir. l96l); Hiclcs
v. Charles Pfizer & Co.,466F. Supp. 2d 799,804-05 (8.D. Tex. 2005). Even though Rule 261
of the Commission's rules provides for the admission of hearsay to determine "facts not
reasonably susceptible of proof under the Idaho Rules of Evidence," the ldaho Supreme Court
has banned the use of all hearsay 'evidence' for purposes of supporting the Commission's
findings. Application of Citizens Utils. Co. 82 Idaho 208,214 35 I P.2d 487 ,490 (Idaho 1960).
In that case, the Idaho Supreme Court unequivocally declared that the Commission "cannot make
a finding based upon hearsay." Id. [n addition, the Supreme Court declared that the ldaho
Commission cannot, under its rulemaking authority,"authorizefindings based onfacts not in
evidence. In any event, the commission cannot by rule transcend the constitutional requirement
of due process." Id. at215,3l5 P.2d at49l. Therefore, the Commission is precluded from
making its findings based upon the dozens of newspaper articles cited by ldaho Power. There is
no other offer of proof in the record as to the impact, or lack thereof, of bitcoinmining operations
on Idaho Power's system. The Commission is therefore left without a record upon which to
justify its findings that Schedule 20 is fair, just and reasonable. Idaho Power simply failed to
avail itself of the Commission's invitation in its order on reconsideration that it will entertain
evidence such as "affidavits in support of comments."28
v
IDAHO POWER'S RELIANCE ON THE PUBLIC UTILITY DISTRICT
CASES FROM WASHINGTON STATE IS MISPLACED
Idaho Power asserts that Schedule 20 is reasonable, in part because "moratoriums on new
service for cryptocurrency mining customers have been "upheld in several cities and local public
utility districts in Washington State. .. ."2e In support of its argument, tdaho Power cites the
28 Order no. 35488 at p. 9.
2e ldaho Power Reply Comments al pp. 2 - 3 .
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Commission to the Cytline, LLC case from Washington State. However, Washington State law,
unlike the ldaho PUC law, does not protect public utility district (*PUD") customers from unfair
and discriminatory rates - which is, of course, the crux of GeoBitmine's argument in this case
As draconian as it may seem, PUD's in Washington State are free to set rates without regard to
whether those rates are fair or discriminatory:
Moreover, the Court notes that Washington law does not constrain public utility districts'
discretion by providing an approved method of rate calculation; in other words, the
contours of the alleged property interest are not defined clearly by state [aw. Given the
Commission's []0] broad discretion to set rates, and given the amorphous nature of a
"fair" rate, Plaintiffs have not demonstrated that they have a legitimate claim of
entitlement to a fair and nondiscriminatory rate under Washington Law.3l
Simply put, citing to Washington State's public utility district's treatment of cryptomining
operations is not analogous to Idaho. Unlike PUD's in Washington State, regulated utilities in
Idaho are prohibited from imposing unfair or discriminatory rates.
VI
IDAHO POWER'S CLAIM THAT SCHEDULE 20 IS
NON-DISCRIMINATORY RINGS HOLLOW
Idaho Power notes the ldaho Supreme Court's decision inthe Homebuilders case to the
effect that not all differences in a utility's rates constitute unlawful discrimination.32
Paradoxically, the Power Company then notes all of the factors that must be considered in order
for a rate to be lawful - none of which are present in this case. According to tdaho Power:
The Court fldaho Supreme Court in Hamebuildersl confirmed that the setting of different
rates and charges for the different classes of customers may be justified by "a reasonable
classification of utility customers" based on factors such as cost of service, quantity of
electricity used, differences in conditions of service, or the time, nature, and pattern of
use.33
r0 PUDs in Washington State operate as municipal corporations at the direction of clected Commissioncrs.rr Blockrree Props., LLC v. Public Util. Dist. No. 2 of Crant Cty. Wash. 447 F.Supp.3d 1030, 1040 (E.D. Wash.
2020). Footnote provided.
r2 ldaho Power Comments at p. 3, quoting ldaho State Homebuilders l/. Washington Ll/ater Power, 107 ldaho 415,
690 P.2d 3s0 ( r 984)
l3 ld.
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CASE NO. IPC.E.2I-37 PACE 15
As noted above, there is no factual record in this case. There has been no cost of service study
completed and no analysis or even factual exposition as to any of the other salient factors that are
required by the Idaho Supreme Court for the creation of a distinct customer class. In an attempt
to connect the dots, Idaho Power asserts, in the next paragraph that its Application is consistent
with "legal precedent" because it:
[H]ighlights the transitory nature of cryptocurrency mining operations worldwide. . . .
The quick influx of transitory load into, and potentially out of Idaho Power's service area
creates significant risk that costs created by the transitory load will ultimately become the
burden of other customers.34
The only "factual" assertion rclied upon by Idaho Power in making this assertion is a footnote
referencing a magazine article,3s which is unreliable hearsay and directly contradicted by the
assertions made by GeoBitmine in its Petition.
vII
PUC STAFF MERELY FOLLOWED IDAHO POWER'S LEAD
AND OFFERED NO INDEPENDENT ANALYSIS OF THE NEED FOR SCHEDULE 20
The Idaho PUC Staff is the only other party to offer substantive comments as to the
alleged need for, and asserted reasonableness of, Idaho Power's Schedule 20. However, in doing
so, the Staff merely accepted Idaho Power's "assumptions" as fact with no critical analysis of
those assumptions and no independent evidence supporting (or rebutting) those assumptions.
According to the Staff:
The design of Schedule 20 is based on the assumption that Schedule 20 customers exhibit
unstable and unpredictable loads and have questionable financial viability making them a
high risk for stranded asset costs that core customers may be responsible to cover.l6
]4 ldaho Power's Answer to GeoBitmine's Petition for Reconsideration at pp. 7 - 8.
15 tdaho Power cites to pages 3 and ll of its Application. On page 3 is the I'ootnote ret'erence to a Forbes magazine
anicle. There are no references to any supporting evidence or information on page 13.
16 Staff Comments at p. 2, emphasis provided.
GEOBITMINE LLC REPLY COMMENTS ON RECONSIDERATION
CASE NO. IPC.E-2I-37 PAGE 16
After noting that the Company's application is "based on" an assumption, Staff s very next
sentence mysteriously leaps the chasm between assumption and fact:
Because of these customers' unpredictable and high-risk nature, it is evident that the
Company has designed Schedule 20 to reside outside of the relatively stable cost
structure used to provide service to the Company's core customers, customers whose
rates are based on embedded average cost and then allocated by class based on cost of
service. lnstead, the Company has designed Schedule 20 to address the risk of servicing
them,37
There is no evidence in the record as to the "unpredictable and high-risk nature" of "these
customers..." It is, however, "evident" that ldaho Power has relied on unreliable hearsay to
attempt to convince the Commission to deviate from standard (and mandatory) ratemaking
principles that dictate class distinctions be made only on cost to serve and demonstrated usage
characteristics such as volume, timing, nature and patterns of electrical usage.
Staffobserved in its Comments on Reconsideration that its "perspective on the need and
design of Schedule has not changed."38 However, Staff failed to observe that its "perspective" is
based on its acceptance of an unsubstantiated "assumption" by Idaho Power with no independent
vcrification of the underlying asserted need for, or design of, Schedule 20. Staff apparently
bought into [daho Power's unconventional (and extra-legal) 'no-harm no-foul' theory of
ratemaking when it asserted that:
Because no customers are culrently eligible for Schedule 20, Staffbelieves the proposed
rate is reasonable...3e
The determination of the reasonableness (or lack thereof) of a rate by the Commission must be
made on substantial and competent evidence - and not on assumptions or the 'belief that there
are no customers currently eligible for that rate.
37|d. at pp.2-3.
r8 StaffComments on Reconsidcration at p. 5.
l') StaffComments at p. 6,
GEOBITMINE LLC REPLY COMMENTS ON RECONSIDERATION
CASE NO. IPC-E-2I-37 PAGE 17
VIII
STAFF'S DISAGGREGATION ARGUMENT IS LEGALLY IMPROPER
AND BASED ON FAULTY FACTUAL ASSUMPTIONS
Staff asserts that the a cryptomining entities have an:
unique ability . . . to disaggregate, expand and contract their electric service needs, and
relocate to other service territories differentiates them from other schedule 9 and l9
customers.40
In addition to being nothing more than an assumption, staff s assertion is factually incorrect.
Many industrial customers have the ability to choose where and in which utility's service
territory they operate at any given time. For example, raw material processing entities (food
processers, lumber mills, cattle for slaughter, chemicals etc) often have facilities (either owned
directly or third-party facilities with available capacity for hire) located in several states and in
several regions within a single state. These entitles often will direct raw product shipments to be
processed between and among factories depending on local costs and conditions - including
electrical costs. Operators of elechic vehicle fleets are able to easily choose where they will
recharge. Staffs attempt to buttress Idaho Power's application thus is easily rebutted, but again
without an evidentiary record it is nothing more that rhetoric in furtherance of an "assumption."
Staff sole legal support for its disaggregation argument is the federal law known as the
Public Utility Regulatory Policies Act of 1984. According to Staff:
The Commission has considered the ability to disaggregate as a factor to justiff different
avoided cost rates for qualifying facilities under the Public Utility Regulatory Policies
Act of 1978 ("PURPA").4r
PURPA, of course, has nothing to do with the legal parametcrs within which this Commission's
retail rate setting authority is restricted. [t offers no precedent for retail ratemaking and does not
preempt or instruct this Commission in its ability to determine customer classifications. PURPA
a0 Staflf Comments on Reconsideration at p. 8.
al StaffComments on Reconsideration at p. 8.
GEOBITMINE LLC REPLY COMMENTS ON RECONSIDERATION
CASE NO. IPC.E.?I.37 PACE I8
is a federal statute that allows state commissions to set rates that utilities pav to wholesale
electric generators - not rates that utilitv customers pay to state regulated monopoly electric
service provides. Retail sales, even if the power originates out-of-state, are subject to exclusive
state jurisdiction.a2 It would be surprising, and contrary to well-established legal precedent, were
this Commission to abdicate its retail ratemaking authority to the federal govemment.
Ix
PRAYER F'OR RELIEF43
GeoBitmine respectfully requests the Commission issue its order on reconsideration
denying ldaho Power's application for approval of Schedule 20.
Dated 6th day of September 2022.
J. Richardson ISB # 3195
RICHARDSON ADAMS, PLLC
a2 Pac. Gas & Elec. Co. v. Lynch, CV 0l-1083-RSWL (SHx),2001 U.S. Dist. LEXIS 5500, at rl0-l I (C.D. Cal.
May 2,2001)
a'1 As a housekeeping matter, the Univenity of [daho asked that GeoBitmine clarify references to it in GeoBitmine's
Petition for Reconsideration to the effect that the University has to date no business. professional or other
relationship with GeoBitmine (either on a formal or an informal basis) and that CeoBitmine's reference to the
University was made without input or review by the University and that the University did not approve or give
license to CeoBitmine to use its trademarked logos.
GEOBITMINE LLC REPLY COMMENTS ON RECONSIDERATION
CASE NO. IPC-E.2I-37 PAGE 19
I HEREBY CERTIFY that on the 6th day of September 2022,a true and correct copy of the
within and foregoing REPLY COMMENTS of GeoBitnine LLC in Case No. IPC-E-21-37 was
served, by electronic copy only, to:
Lisa D. Nordstrom
Regulatory Dockets
Idaho Power Company
lnordstrom@ idahopower.com
dockets@ i dahopower. co m
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
jan. noriyuki@puc. idaho. gov
Commission Secretary
Idaho Public Utilities Commission
sec retarv(a)p uc. i daho. gov
Connie Aschenbrenner
Idaho Power Company
caschenbren ner@ idahopower.com
Riley Newton
Deputy Attorney Ceneral
riley.newton@puc. idaho. qov
Elizabeth A. Koecheritz
2lzt0 Labs LLC
[e-mail]
Megan Goicoechea Allen
Corporate Counsel
Idaho Power Company
mgoicoecheaal len@ idahopower.com
Peter Richardson
ISB # 3195
GEOBITMINE LLC REPLY COMMENTS ON RECONSIDERATION
CASE NO. IPC-E-2I-37 PAGE 20
Peter J. Richardson ISB # 3195
RICHARDSON ADAMS, PLLC
515 N.27h Sfieet
Bois€,Idalro 8t702
Telcphone: (208) 938-790 I
petor'@richardsonadams. com
Attorneys for GeoBifinine LLC
BEFORE TIIE IDATIO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPI"TCATION OF
IDAHO POWER COMPANY FOR AT,ITHORITY
TO ESTABLISH A NEW SCHEDI,'LE TO SBRVE
SPECULATIVE HIOH.DENSITY LOAD
CUSTOMERS
cAsE NO.IPC-E 2l-37
GEOBTTMINE'S REPLY COMMENTS ON
RECONSIDERATION
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D(HIBIT ONE
Rocky Mountain Power's Wyoming TariffSchedule- Original Sheet No. i0-1, P.S.C. Wyoming
No. 17 Interruptible Sentice Pilot Schedule 30
ROCI(Y MOUNTAIN POWER
Origlnal Sheet No.30-1
P.S.C. Wlomlng No. 17
lnterruptible Serulce Pilot
Schedule 30
Available
ln all tenitory served by the Company in the State of Wyoming.
Applicable
To non-rcsidential Customers receiving service under Schedule 46 or Schedule 487
who are not already enrolled in Schedule 31 - Real-Time Day Ahead Pricing Pilot.
Participation will be limited to the first 25 MW of load. A single Customer may not
enroll in this schedule for more than 10 MW of service.
Electric Servlce Gharge tlonthly Billlng
The Monthly Billing shall be the lntem.rptbb Demand Crcdit, lnteruptible Energy
Credit, and Administrative Fee. The Monthly Billing is in addition to all other charges
contained in Schedule 46 or Schedule 48T.
Monthly Billing
lntenuptlble Demand Gredlt
Per kW of On-Peak Intemrptible Demand -$1.00
lntemrptible Energy Credit
Per kWh of lntemrpted Energy -?O.AOOf,
Adminishative Fee
Per month $90.00
Interruptlon Events
The Company may call up to 100 hours of lntemrptlon Events each calendar year.
One lntenuption Event may be called each day and may not exceed 3 consecutive
hours. Each lntemrption Event called by the Company shall be set for a period of at
least t hour in duration and shall have a duration that includes 1S-minute interval
increments. lntemrption Events may be called on any day or at any time during theyear. During lnteruption Events, a participant's usage shall not exceed their
Baseline Non-lntemrptible Load.
(continued)
lssued by
Joelle R. Steward, Vice President, Regulation
lssued: June25,2021 Effective: With service rendered
on and after July 1,2021
wY 30-1.E Dkt. No. 20000-578-ER-20
ROCKY MOUNTAIN POWER
Original Sheet No. 30-2
P.S.C. Wyoming No. 17
lnterruptible Service Pilot
Schedule 30
lnterruption Notifi catlon
At least 30 minutes prior to an lntemrption Event, the Company shall notiff
participants. lf possible, the Company wil! make a good faith effort to notiff
participants on the day before it believes that an lntenuption Event is likely.
lnterrupted Energy
lnteruptible Energy during each lntemrption Event shall be measured as the
difference between the average load in kW for the 2 hours preceding the lntenuption
Event and the Baseline Non-lntemrptible Load multiplied by the duration of the
lnterruption Event in hours.
lnterruptible Demand
lnterruptible Demand shall be measured as the kW shown by or computed from the
readings of the Company's demand meter for the highest 1S-minute period during
On-Peak as defined by Schedule 46 or Schedule 48T during the month, determined
to the nearest kW, less the Baseline Non-lnteruptible Load.
Baseline Non-lnterruptible Load
Once per calendar yeaL participants may nominate a Baseline Non-lntemrptible
Load in kW which shall not be subject to lnterruption Events. Participants must
nominate a Baseline Non-lntemrptible Load that results in at least 1,000 kW of
lnterruptible Load.
lntemrptible Service Term
Unless othenrise removed from this schedule by the Company, participants shall
agree to remain on lntemrptible Service for a period of no less than 12 months.
After terminating service under this schedule, a Customer may not re-enroll lor a 12-
month period.
Non-Performance
lf a participant does not interrupt its load by reducing its usage down to its Baseline
Non-lnterruptible Load or less during an lntemrption Event, the participant shall be
subjec{ to the following penalties:
lssued by
Joelle R. Steward, Vice President, Regulation
lssued: June25,2O21 Effective: With service rendered
on and after July 1,2021
wY 30-2.E Dkt. No. 20000-578-ER-20
ROC}ff MOUNTAIN POWER
Original Sheet No.30-3
P.S.C. Wyomlng No. 17
lnterruptible Service Pilot
Schedule 30
Non-Perfonnance (conti nued)a. For the first failure in a rolling 12-month period, the participant shall forfeit its
lntemrptible Demand Credit and lntem.rptible Energy Credit for the month in
which it failed to interrupt.b. For the second failure in a rolling 12-month period, the participant shall forfeit
its lntenuptible Demand Credit and lnterruptible Energy Credit for the month
in which it failed to interrupt and for the prior six months.c. For the third failure in a rolling 12-month period, the participant shall be
removed from service on this schedule.
Participants removed from the schedule may not retum to lnterruptible Service for a
period of 12 months.
Meterlng Upgrade/Update
As a condition of receiving service on this schedule, the Company may elect to
upgrade and/or update the Customer's metering to record five-minute interva! data
and othenrvise be capable of being a participating resource in the Energy lmbalance
Market. Any metering upgrade and/or update shall be at the Custome/s expense.
The Company shall provide an estimate of the metering upgrade and/or update to
the Customer prior to incuning any expense.
First Year Enrollment
For the first year of this pilot, Customers shall have until November 1, 2021 to
request enrollment in this schedule. lf morc interest is received than the 25 MW
program cap, eaci participant shall be able to enroll for up to a pro-rata share of the
cap. After November 1,2021, participation in this schedule shall be available on a first-
come, fi rst-served basis.
Program Removal
At its sole discretion, the Company may elect to not provide service under this
schedule or remove from participation Customers with seasonal loads that do not
correspond to the times of the year when anticipated lnteruption Events may occur.
lssued by
Joelle R. Steward, Vice President, Regulation
lssued: June 25,2021 Effective: With service rendered
on and after July 1,2021
wY 30-3.E Dkt. No. 20000-578-ER-20