20230814Final_Order_No_35888.pdf

ORDER NO. 35888 1
Office of the Secretary
Service Date
August 14, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
AUTHORITY TO ESTABLISH
COMPENSATION FOR THE
MANDATORY INTERRUPTION
REQUIREMENT OF SCHEDULE 20 –
SPECULATIVE HIGH-DENSITY LOAD
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CASE NO. IPC-E-22-30

ORDER NO. 35888

On December 28, 2022, Idaho Power Company (“Company”) applied to the Idaho Public
Utilities Commission (“Commission”) for an order prior to the start of the June 15 – September
15 interruption period: (1) establishing a compensation rate of $0.0734 per kilowatt (“kW”) per
hour of interruption for Large General Service Rates under Schedule 20, and $0.0835 per kW per
hour of interruption for Large Power Service Rates (“Proposed Rates”) or, in the alternative, (2)
deferring implementation of a compensation structure for the mandatory interruption requirement
of Schedule 20 until evaluation of cost assignment responsibility for Schedule 20 was completed
in a general rate case.
On January 18, 2023, the Commission issued a Notice of Application and Notice of
Intervention Deadline. Order No. 35666. No one intervened.
The Company filed a Scheduling Request on February 22, 2023, after conferring with Staff,
stating that it no longer sought a Commission order in this case before June 15, 2023.
On March 8, 2023, the Commission issued a Notice of Modified Procedure setting public
comment and Company reply deadlines. Order No. 35699. Staff filed comments to which the
Company replied. No other comments were filed.
With this Order, we approve the Application as filed.
BACKGROUND
On November 4, 2021, the Company applied to the Commission for authority to establish
a new electric service schedule (Schedule 20) to serve speculative high-density load customers—
specifically, large-scale cryptocurrency mining operators.1 Schedule 20 incorporated the features
of the Company’s existing Schedule 9 (Large General Service) and Schedule 19 (Large Power

1 ln the Matter of Idaho Power Company’s Application for Authority to Establish New Schedule To Serve Speculative
High-Density Load Customers, Case No. IPC-E-21-37, Application at 1-2 (Nov. 4, 2021).
ORDER NO. 35888 2
Service) rate design but made three modifications: (1) implementation of mandatory,
uncompensated fully interruptible service during the summer peak season for up to 225 hours a
year; (2) a reallocation of the portion of cost-of-service derived summer generation capacity costs
currently collected in an on-peak demand charge; and (3) energy priced at marginal cost.
The Commission initially approved the implementation of Schedule 20, as filed. See Order
No. 35428 at 7. GeoBitmine LLC filed a Petition for Reconsideration of Order No. 35428. In its
final order on reconsideration, the Commission affirmed all three provisions of Schedule 20, with
one exception. See Order No. 35550 at 16. Specifically, the Commission found that the record
would not support mandatory uncompensated interruption. Although the Commission believed
that mandatory interruptible service during the summer peak season under Schedule 20 was
reasonable, the Commission did not believe the record supported implementation of an
“uncompensated mandatory interruptible service provision.” Id. at 22. Accordingly, the
Commission directed the Company to apply to the Commission for the determination of a
reasonable rate under Schedule 20.
THE APPLICATION
The Company explained its Schedule 20 included a requirement for mandatory,
uncompensated interruption at the Company’s discretion annually between the hours of 1:00 p.m.
to 11:00 p.m., Monday through Friday, excluding holidays, from June 15 through September 15,
with a maximum of ten hours per interruption event and not to exceed 225 hours a year.
The Company’s Application sought a Commission order (1) establishing the Proposed
Rates under Schedule 20; or (2) deferring the approval of the compensation for mandatory
interruption under Schedule 20 until after an evaluation of cost assignment responsibility is
determined in the Company’s upcoming general rate case.
The Company stated the Proposed Rates were its primary recommendation for
compensation under Schedule 20. The Company explained that these rates “were derived by
dividing the annual peak load functionalized per kW cost by the total potential hours of
interruption”—for Large General Service customers ($16.51 divided by 225 hours) and for Large
Power Service customers ($18.79 divided by 225 hours). Application at 9-10.
The Company’s alternative recommendation proposed forgoing compensation to Schedule
20 customers until there is an evaluation of cost assignment responsibility in a general rate case.
ORDER NO. 35888 3
The Company explained that there are currently no customers taking service under
Schedule 20. However, the Company noted that potential customers under Schedule 20 would
likely operate with high load factors, often greater than 90%, which results in a higher coincidence
to the Company’s system peak. These characteristics—energy use and coincidence to system
peak—the Company claimed, distinguished Schedule 20 customers from customers taking service
under Schedules 9 and 19. The Company explained that energy use and coincidence to system
peak are two factors largely comprising class cost assignment. The Company expressed concern
that, until it has Schedule 20 customers from which it can collect data and is able to evaluate cost
assignment responsibility in a general rate case, non-Schedule 20 customers could over-
compensate Schedule 20 customers for mandatory interruption.
STAFF COMMENTS
I. The Need for Interruptible Compensation
Staff believed that including interruptible compensation was justified for Schedule 20
because Schedule 20 is based on previously approved rate structures in Schedules 9 and 19.
However, under Schedule 20, Staff noted customers would pay for some on-peak demand-related
costs through the Schedule’s billing demand charge justifying some form of interim interruption
compensation. Due to Schedule 20’s unique characteristics, Staff ultimately believed the Company
should revaluate Schedule 20 when actual customer data is available to determine the method and
appropriate compensation.
II. The Company’s Proposals
Staff reviewed the Company’s proposed methods of compensating Schedule 20 customers
for interpretability and believed that providing compensation under the Company’s first proposed
method was reasonable. The first method is an interim method that could be utilized until Schedule
20 customer data is available to determine compensation for Schedule 20. This would involve
using cost assignments for Schedule 9 and Schedule 19 customers to determine the amount of
compensation until there is sufficient verifiable data from Schedule 20 customers. Staff believed,
this method to be more conservative in its proposed compensation for Schedule 20 customers due
to the possibility of Schedule 20 customers having higher load factors than typical Schedule 9 and
Schedule 19 customers and compensation for interruption only being paid if and when interruption
occurs. However, the second compensation method would provide no compensation until the
ORDER NO. 35888 4
Company obtained specific Schedule 20 customer data sufficient to calculate the appropriate
compensation under Schedule 20.
Staff thus preferred the first compensation method in the interim because, while its
compensation would be set to mitigate potential harms to other customer classes, it would be based
on previously approved Commission rates to provide Schedule 20 interruptible customers with
some form of interim compensation. Staff also noted that the second method’s proposal of
reevaluating Schedule 20’s interruptible customers’ compensation based on actual customer data
will happen regardless of whether or not the Schedule 20 customers received interim
compensation.
Staff noted that the Company proposed compensation provided under Schedule 20 should
be 100% recoverable through the Power Cost Adjustment (“PCA”) with no customer sharing. Staff
believed this was reasonable, because of the Company’s obligation to serve Schedule 20 customers
and because it would not be reasonable to negotiate interruptible compensation for individual
Schedule 20 customers.
Staff noted the revised tariff accurately reflects the Company’s primary interruption
compensation proposal and includes the Company’s proposed measurement of load reductions
from interruption events. However, Staff recommended that the rates and parameters for
interruptible service be carefully reviewed in the next general rate case or after Schedule 20
customers are established since actual Schedule 20 customer data is most appropriate for
determining these parameters and rates for compensation.
III. Comparing Existing Programs and Schedules in Relation to Interim Compensation
a. Flex Peak Demand Response Comparison
Staff stated that the Company’s Schedule 82 Flex Peak Program (“Flex Peak Program”)
provides the most direct comparison for determining interim compensation rates. Staff noted that
this program is already available to Schedules 9 and 19 and not applicable to special contract
customers. Staff noted that the Flex Peak Program provides $3.25 per kW for each week of
participation as a fixed cost and an additional $0.20 per kilowatt-hour as a variable rate when
interruption occurs. Staff noted that modeling its Schedule 20 compensation directly from the Flex
Peak Program had the limitation of potentially overcompensating the Schedule 20 customer—
given that Schedule 20 is mandatory. Staff believed interim compensation amounts derived from
the “embedded cost of peak-load serving resource presents less risk of overcompensation while
ORDER NO. 35888 5
still allowing some form of compensation until the Schedule can be evaluated with actual customer
data in a general rate case.” Staff Comments at 7. Accordingly, Staff supports the Company’s
proposed interim compensation rates for Schedule 20 Large General Service and Large Power
Service.
b. Existing Schedule Comparisons
Staff reviewed several schedules used in other states and by other utilities that were most
analogous to the Company’s proposed Schedule 20 compensation plan. Despite certain similarities
in the purposes of these tariff schedules, Staff determined that they were not reasonable for
comparison in this case. Staff recommended the Commission approve the Company’s proposed
interim rates as filed.
COMPANY REPLY COMMENTS
The Company agreed with Staff that data from actual customers would be most helpful
when determining the appropriate level of compensation for interruption under Schedule 20. The
Company also noted it intends to update the marginal energy component of Schedule 20 to better
align with analogous portions of Schedules 9 and 19 time-of-use periods by substituting
AURORA-based marginal energy rates for DSM avoided costs-based marginal rates. The
Company asked that the Commission approve interim interruption compensation for Schedule 20
at the Proposed Rates. The Company also asked that the Commission approve 100% recovery of
this compensation through the PCA.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-502 and 61-
503. The Commission is empowered to investigate rates, charges, rules, regulations, practices, and
contracts of public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provision of law, and to fix the same by order. Idaho Code
§§ 61-502 and 61-503.
The Commission has reviewed the record, including the Application, Staff’s comments,
and the Company’s reply. Accordingly, the Commission finds that the Company’s Proposed
Interim Rates for compensating interruption under Schedule 20 are reasonable. The Commission
believes that the rates—based on avoiding some or all of Schedule 20 base rate charges designed
to recover the cost of the Company’s peak-serving resources and paid only when interruption
occurs—serves as appropriate interim compensation until a rate can be designed using sufficient
ORDER NO. 35888 6
data from actual Schedule 20 customers. The Proposed Rates are therefore approved. The
Commission also finds it reasonable to allow the Company to recover 100% of the compensation
paid under Schedule 20 in its PCA.
ORDER
IT IS HEREBY ORDERED that the Company’s proposed interim interruption
compensation rates under Schedule 20 for Large General Service and Large Power Service shall
be set at $0.0734 per kW per hour of interruption and $0.0835 per kW per hour of interruption
respectively.
IT IS FURTHER ORDERED that the Company shall be allowed to recover 100% of the
compensation costs for interruption in the PCA.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this order about any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. Idaho Code § 61-626.
DONE by order of the Idaho Public Utilities Commission at Boise, Idaho this 14th day of
August 2023.

__________________________________________
ERIC ANDERSON, PRESIDENT

__________________________________________
JOHN R. HAMMOND JR., COMMISSIONER

__________________________________________
EDWARD LODGE, COMMISSIONER

ATTEST:

__________________________________
Jan Noriyuki
Commission Secretary

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