20230606Reply Comments.pdf

Donovan E. Walker
Lead Counsel
[e-mail]
June 6, 2023
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-23-01
In the Matter of Idaho Power Company’s Application for a Certificate of
Public Convenience and Necessity for the Boardman to Hemingway 500-
kV Transmission Line
Dear Ms. Noriyuki:
Enclosed for electronic filing, please find Idaho Power Company’s Reply
Comments in the above-referenced matter.
If you have any questions about the attached filing, please do not hesitate to
contact me.
Very truly yours,
Donovan E. Walker
DEW:sg
Enclosures
RECEIVED
Tuesday, June 6, 2023 4:22:53 PM
IDAHO PUBLIC
UTILITIES COMMISSION

IDAHO POWER COMPANY’S REPLY COMMENTS - 1
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]

Attorney for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR A
CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY FOR
THE BOARDMAN TO HEMINGWAY 500-KV
TRANSMISSION LINE.

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CASE NO. IPC-E-23-01

IDAHO POWER COMPANY’S
REPLY COMMENTS

Idaho Power Company (“Idaho Power” or “Company”) respectfully submits these
Reply Comments in response to Comments filed by the Idaho Public Utilities Commission
(“Commission”) Staff (“Staff”), the Idaho Conservation League (“ICL”), the City of Boise
City (“Boise City”), and the Idaho Irrigation Pumpers Association, Inc. (“IIPA”), collectively
the “Commenting Parties” on May 23, 2023. Idaho Power appreciates the Commenting
Parties’ support for an order granting the Company a Certificate of Public Convenience
and Necessity (“CPCN” or “Certificate”) to construct a 300-mile long, overhead, 500-kV
high voltage transmission line between the proposed Longhorn Station near Boardman,

IDAHO POWER COMPANY’S REPLY COMMENTS - 2
Oregon to the existing Hemingway Substation in southwest Idaho (“B2H project”),
necessary to meet the identified capacity deficiency in 2026. In these Reply Comments,
Idaho Power will clarify concerns raised, and address proposals presented, by various
Commenting Parties in their Comments.
I. BACKGROUND
1. Idaho Power serves more than 600,000 customers in a 24,000-square mile
service area across southern Idaho and eastern Oregon. With 17 low-cost hydroelectric
projects as the core of the Company’s energy mix, Idaho Power’s residential, business
and agricultural customers pay some of the nation’s lowest prices for electricity. Between
1996 and 2021, firm peak-hour load has increased from 2,437 megawatts (“MW”) to 3,751
MW in 2021—a new system peak hour record reached on June 30, 2021. In addition, on
December 22, 2022, Idaho Power set a winter system peak hour record of 2,604 MW.
2. The Company anticipates adding approximately 13,300 customers each
year throughout the next 20 years, including significant commercial and industrial growth.
The anticipated load forecast for the entire system predicts summer peak-load
requirements will grow nearly 55 MW per year, and the average energy requirement is
forecast to grow about 30 average megawatts (“aMW”) per year1. Further, preliminary
2023 Integrated Resource Plan (“IRP”) load forecast results show a notable increase
above 55 MW per year. To meet this growing demand, Idaho Power’s 20-year resource
plan2 includes the addition of 3,790 MW of new non-carbon emitting resources consisting
of wind, solar, and storage technologies; the addition of the B2H transmission line; and a
variety of demand-side management resource additions.

1 See Idaho Power Company’s 2021 IRP, December 2021.
2 See Case No. IPC-E-21-43.

IDAHO POWER COMPANY’S REPLY COMMENTS - 3
3. Once operational, the B2H project will provide the Company increased year-
round access to reliable, clean, and low-cost market energy purchases from the Pacific
Northwest, including during those times when energy demand from Idaho Power’s
customers is at its highest. The B2H project has been a cost-effective resource identified
in each of Idaho Power’s IRPs since 2009 and continues to be a cornerstone of the
Company’s 2021 IRP preferred portfolio. As can be seen in the 2021 IRP, the lowest-cost
resource portfolio includes B2H, and the best non-B2H portfolio has a significant cost
premium. As a resource alone, B2H is the lowest-cost alternative to serve Idaho Power’s
customers in Idaho and Oregon.
II. IDAHO POWER’S REPLY
A. The Commission Should Adopt the Commenting Parties’ Recommendation
to Grant the Company a CPCN.

4. Under Idaho law, the Company has an obligation to provide adequate,
efficient, just, and reasonable service on a nondiscriminatory basis to all those that
request it within its service area. The Company must acquire additional resources to meet
the identified capacity deficits on its system in order to comply with its continuing
obligation to serve customers and thus is requesting an order from the Commission
affirming that the public convenience and necessity requires the same. The B2H project
as a resource has repeatedly demonstrated to be the most cost-effective method of
serving projected customer demand, and as a transmission line the B2H project also
offers incremental ancillary benefits, additional operational flexibility, and access to clean
energy in the Pacific Northwest. The B2H project represents a cost-effective means of
providing adequate and reliable service to the customers in Idaho Power’s certificated

IDAHO POWER COMPANY’S REPLY COMMENTS - 4
service territory. To meet the identified 2026 capacity deficits, the Company must begin
construction of the B2H project in summer 2023.
5. Idaho Power appreciates the Commenting Parties’ extensive review of the
history behind the capacity deficiency and resulting need for B2H, the account of the
extensive siting and permitting processes, the myriad agreements associated with B2H
project participants, and their recommendation that the Commission grant the Company’s
request for a CPCN. In their Comments, Boise City notes “the Company has reasonably
demonstrated both a need for new resources to meet capacity deficits and, . . . that B2H
is necessary for the development of least-cost, least-risk energy portfolios to reliably
serve customer demand over time.”3 Further, IIPA noted, “B2H enhances reliability by
providing access to a market that experiences peak demand in different seasons and
times of day than [Idaho Power]”4 concluding that “[w]hen market energy is available,
market access is one of the most reliable system resources.”5 Moreover, in their review
of the Company’s request, ICL notes that, “[a]s modeled, the B2H line is broadly
necessary for the [C]ompany to address projected load-growth, regional resource
adequacy and diversity, and market integration.”6 Finally, Staff “agrees that B2H is a
significant part of the least-cost resource portfolio”7 and believes that the B2H cost is
reasonable. All the Commenting Parties recommend the Commission grant Idaho
Power’s request for a CPCN.
6. In addition to analyzing the need for, and costs associated with, B2H, Staff
performed an extensive review of the several other transactions necessary for B2H but

3 Boise City Comments, pg. 2.
4 IIPA Comments, pg. 6.
5 Id.
6 ICL Comments, pg. 2.
7 Staff Comments, pg. 9.

IDAHO POWER COMPANY’S REPLY COMMENTS - 5
not directly related to construction and operation of the B2H project, including four asset
exchanges, two separate construction agreements, Bonneville Power Administration
buyout agreements, and various transmission service agreements. Idaho Power
appreciates Staff’s diligence in their review of the intricate and complex transactions
necessary to facilitate the B2H project ownership and operation. The Company supports
Staff’s recommendation that the Commission clarify, in granting a CPCN, it applies to only
the B2H project and “does not include the other agreements described in the
Application.”8 Staff’s recommendation in this instance aligns with Idaho Power’s intent to
bring separate future filings to the Commission for approval of the referenced asset
exchange and/or other supporting agreements that warrant Commission review and
approval. In support of Idaho Power’s request for a CPCN, the Company felt it was
important to make the Commission aware of the relevant partnership agreements to
ensure a complete understanding of the potential ownership structure, related
transactions and other important provisions related to Idaho Power’s ownership and
operation of B2H. In granting the requested CPCN in this case it is not necessary for the
Commission to explicitly approve any of the supporting agreements at this time; however,
the Company believes it would be appropriate for the Commission to acknowledge in this
case that the underlying partnership agreements that provide for the line to be constructed
are reasonable in their current states. The Company supports Staff’s recommendation
that when issuing a CPCN the Commission make “the project’s recovery contingent on
the Commission’s approval of all Asset Exchanges . . .”9

8 Staff Comments, pg. 6.
9 Staff Comments, pg. 19.

IDAHO POWER COMPANY’S REPLY COMMENTS - 6
B. Idaho Power Will Justify All B2H Project Costs as Part of a Future
Proceeding.

7. In their Comments, Staff has identified three types of project risks
associated with B2H: capability risks, schedule risks, and cost risks. In their analysis of
these risks, Staff found that “[b]ecause of the complexity and amount of uncertainty
associated with the B2H transmission project, the Company faces significant risks
throughout the entire project life cycle that may ultimately impact customers”10 and
therefore recommends the Commission establish a soft cap. The soft cap is to represent
“the threshold that will require the Company to provide robust justification for construction
costs over the cap to receive recovery.”11 Idaho Power agrees with Staff’s assessment of
the project risks but does not believe a soft cap is necessary.
8. As explained in the Company’s Application, Idaho Power is not requesting
binding ratemaking treatment in this case. The Company has not yet selected contractors
for the construction phase and as a result, a number of contractual terms have not been
executed. Because the B2H project cost estimate was based on Idaho Power’s most
recent forecast of project costs at the time of filing, the Company’s request in this case is
that the Commission find Idaho Power has met the requirements of Idaho Code § 61-526
and issue an order granting a CPCN. The Company will make a future filing to address
the cost recovery associated with these projects. It is in this future proceeding that Idaho
Power will justify all costs associated with the B2H project, not just those costs over the
soft cap, if any. As evidenced by Staff’s risk analysis, there are multiple components of
the project, many of which are dependent upon each other. Therefore, it is imperative in

10 Staff Comments, pg. 9.
11 Id.

IDAHO POWER COMPANY’S REPLY COMMENTS - 7
a prudence review of costs associated with a project as complex as the B2H project, that
a discussion of all costs occurs at the same time.
9. If, however, the Commission finds it necessary to implement a soft cap, the
Company requests that clarification of Staff’s proposed addition to the soft cap amounts
be made. In their Comments, Staff appropriately highlights that if B2H is delayed beyond
June 1, 2026, Idaho Power may “incur additional expenses to implement a workaround
for the capacity deficit.”12 Further, Staff suggests that the Commission should require the
Company to track and report any expenses incurred outside the B2H project expenditures
and that those expenditures be “subject to the same soft cap limit recommended” by Staff.
It is unclear if Staff is suggesting any incremental costs incurred due to a delay in the B2H
2026 in-service date be either (1) additive to the total B2H project costs, identified in
Attachment A to Staff’s Comments, such that the sum of the two must fall under the soft
cap proposed by Staff, or (2) in total, the incremental costs must be less than the soft cap
proposed by Staff.
10. It is worth noting that the incremental cost associated with a delay in B2H
has been quantified. As part of the 2021 IRP, Idaho Power modeled the costs associated
with a Base with B2H in 2027 portfolio to demonstrate how the Company will serve native
load customers if B2H is delayed one year and the associated costs. The one-year delay
in B2H’s on-line date kicks off a cascading series of differences in the next least cost
portfolio. Those differences prior to 2027 include the procurement of an additional 200
MW of wind, 200 MW of solar, and 200 MW of storage. In addition to the resource
procurements, the delay in B2H timing also delays an exit from coal operations of Jim

12 Staff Comments, pg. 12.

IDAHO POWER COMPANY’S REPLY COMMENTS - 8
Bridger Unit 3 by one year. After the delayed B2H line is in-service, the change in
resources procured because of its delay cause changes to the rest of the plan. Based on
the 2021 IRP modeling, the resource changes discussed result in a portfolio cost increase
of $69 million. This modeling is being performed again as part of the 2023 IRP, currently
under development, and any such incremental costs will be quantified. However, because
these amounts would be associated with procurement of resources other than those that
are subject to this proceeding, Idaho Power does not believe it is appropriate to include
these costs in any quantification of a B2H project soft cap, if the Commission deemed a
soft cap necessary.
C. The Tracking of Clean Energy Resources Delivered Via B2H is Not
Necessary.

11. Idaho Power appreciates ICL and Boise City’s Comments in support of B2H,
highlighting the project’s ability to facilitate the delivery of clean energy resources, and
their recommendation that the Commission grant the CPCN requested by Idaho Power.13
The Company, however, disagrees with the recommendation of both ICL and Boise City
that the Commission condition the issuance of the CPCN on the requirement to report the
clean energy resources delivered across B2H. While both parties appropriately highlight
that B2H will facilitate the integration of renewable power and access to clean energy, it
is important to note that Idaho Power’s evaluation of the B2H project is as a resource and
the method for cost-effectively meeting projected customer demand. The declaration that
the project will provide access to clean energy is an ancillary benefit of B2H, not the
primary support for the line.

13 ICL Comments, pg. 2, Boise City Comments, pg. 2.

IDAHO POWER COMPANY’S REPLY COMMENTS - 9
12. That being said, neighboring states have greenhouse gas reduction
requirements, environmental, and climate change goals to meet. There are ample
amounts of clean energy being produced in the western United States, with wind in
Wyoming, solar in Arizona, and hydro in the Northwest but that energy must be moved
from the places its produced to the people who use it. In addition, the key to cleaner
energy is not just where it is generated—it’s also when. Transmission lines, and
connections with other grids, help with renewable integration by providing connections to
these geographically diverse loads and resources. The B2H project will aid the region by
providing an immediate connection to move wind and solar power across the western
states so customers can get clean energy any time of the day, with less reliance on carbon
heavy sources like gas and coal—progress toward a clean energy future in the western
United States.
13. Idaho Power is not, however, asserting that all energy delivered across B2H
will be clean energy. The Company’s transmission system is a critical component of Idaho
Power’s resource planning and the ability to provide reliable and fair-priced energy
services. When evaluating and comparing alternative resources as part of the Integrated
Resource Planning process, the capital cost and energy cost of a project are considered
for both transmission capacity and supply-side resource additions. Energy prices are
based on forecasted gas prices, coal prices, nuclear prices, hydro conditions, and
variable operations and maintenance expenses. Portfolios that include transmission
capacity as a resource addition include costs associated with market purchases, as
forecasted in the detailed modeling analysis. Thus, as a component of Idaho Power’s
least-cost preferred portfolio, market purchases facilitated by B2H were modeled based

IDAHO POWER COMPANY’S REPLY COMMENTS - 10
on the lowest cost generation available to meet the Company’s demand, regardless of
whether it is carbon-free or not.
14. Additionally, ICL and Boise City’s recommendation that the Company report
the clean energy resources delivered across B2H is impractical. Idaho Power does not
have the ability to identify the clean attributes of all energy flowing across any of the
Company’s transmission lines. Electricity that flows between or across utility areas
requires a North American Electric Reliability Corporation tag. The tag identifies the
source of the generation but not the specific resource. The information that is contained
in the tag, however, including the megawatt-hours and costs, is reported publicly in Idaho
Power’s Federal Energy Regulatory Commission Form 1, by Company name, annually
for informational purposes. The recommendation that Idaho Power report clean energy
resources delivered across B2H is further complicated by the fact that when a third party
is using the Company’s transmission system to wheel energy across B2H for example,
Idaho Power is unaware of the source of the generation. The Company is sympathetic to
ICL and Boise City’s desire to ensure B2H provides a pathway for clean energy, but the
reporting of resources delivered across the line is not feasible at this time.
D. The Company is, and Always Has Been, Continuously Evaluating Federal
Funding Options for the B2H Project.

15. Over the years, to incentivize investment in critical transmission
infrastructure, the federal government has provided various federal funding opportunities
for certain eligible transmission projects. In their Comments, Staff discusses the
Company’s B2H project cost estimate, indicating the cost is reasonable. They note
however that they are concerned Idaho Power has not pursued alternative funding that

IDAHO POWER COMPANY’S REPLY COMMENTS - 11
could potentially reduce the cost impact to customers.14 The Company has, however,
been diligent in its efforts to identify sources of federal funding applicable to the B2H
project for years. In fact, to ensure no funding opportunities are overlooked, Idaho Power
hired consultants that are experts in federal grants for grid resilience and transmission.
Through advisement by the Company’s consultants, and interactions from the United
States Department of Energy (“DOE”), projects like B2H that have been significantly
permitted, engineered, and have substantial funds expended, are typically not candidates
for incentives under the Infrastructure Investment and Jobs Act (“IIJA”).
16. One of the major DOE efforts is the DOE Grid Deployment Office, which
sent out to identify nationally-significant routes through a transmission needs study
ultimately developing a national grid plan. The DOE’s initial draft study was released in
February 2023 with a final study anticipated in summer 2023. Projects that land within the
nationally significant routes can be considered for new DOE financing under the (1)
Transmission Facilitation Program, which supports financing arrangements for new,
replacement or upgraded lines, (2) Enhancing Grid Resilience, providing matching grants
for existing infrastructure upgrades for hardening to reduce risks from wildfires or other
extreme weather and to prevent outages, and (3) Advanced Grid Technologies, offering
matching grants for increased capacity and enhanced flexibility of the existing grid. While
the Enhancing Grid Resilience program may offer similar incentives to a new construction
line as it is being built, the B2H project does not qualify for either the Transmission
Facilitation Program or the Advanced Grid Technologies option. Because the
Transmission Facilitation Program is targeted toward hard-to-finance projects in order for

14 Staff Comments pg. 9.

IDAHO POWER COMPANY’S REPLY COMMENTS - 12
them to become financially viable and the Advanced Grid Technologies is for existing
infrastructure, the B2H project does not qualify. As construction of B2H commences,
Idaho Power continues to evaluate individual aspects of the Enhancing Grid Resilience
grants for potential viability to new transmission.
17. The IIJA also provides new funding for existing DOE financing under its
Loan Program Office. The B2H project is not eligible for loan guarantees under the Loan
Program Office because the capacity of the project is fully subscribed. The B2H project
is also not a good candidate for the existing loan program administered by the Western
Area Power Administration’s Transmission Infrastructure Program as B2H is not
expressly designed to carry new renewable project output. While B2H is not an ideal
candidate project for the majority of the options under the IIJA, future high voltage
transmission projects are an area that the Company will continue to monitor for grant
opportunities.
18. In addition to the IIJA, the Inflation Reduction Act of 2022 provides
incentives for funding of certain eligible transmission projects, also meeting the DOE’s
designation as falling within national interest corridors, under the DOE’s Transmission
Facility Financing program and the DOE’s Transmission Siting and Economic
Development Grants program. The Transmission Facility Financing program provides
loans to support new project development, however because the B2H project has already
been significantly developed, it is downstream of the program’s objectives and does not
qualify. Likewise, providing grants that enable siting, community engagement, economic
development in communities that are disadvantages, underserved or frontline, the B2H

IDAHO POWER COMPANY’S REPLY COMMENTS - 13
project does not qualify for the Transmission Siting and Economic Development Grants
program as the project is already sited and permitted.
19. Finally, as evidence of Idaho Power’s continued efforts for federal funding
opportunities, outside of the B2H project, Idaho Power submitted two concept papers to
the DOE for the Grid Resilience and Innovation Partnership Program (“GRIP”) in
December 2022 as a prerequisite for submitting full applications. In February 2023, the
DOE notified Idaho Power that the concept papers aligned well to the IIJA guidelines and
encouraged the Company to submit full applications for both projects. Idaho Power
subsequently submitted the applications for both projects and anticipates a response from
the DOE in early Fall 2023. The Company has evaluated extensively, and will continue to
do so, federal funding opportunities for B2H in an effort to reduce costs to customers,
providing Staff with the most recent update as part of discovery in this proceeding. It
should be noted that Idaho Power’s efforts to minimize the impacts of large investments
on customer rates through federal funding did not start with the B2H project; the Company
successfully leveraged investments in the Advanced Metering Infrastructure project to
obtain American Recovery and Reinvestment Act funding from the DOE for a Smart Grid
Investment Grant in 2009. As such, the Company does not believe that providing
evidence of its pursuit of alternative funding sources for B2H when a request for prudence
of the expenditures is made, as suggested by Staff, is necessary.15 Idaho Power is
continuously seeking options to lower costs to customers and keeps the Commission
apprised of those attempts, including any successful efforts to obtain them.

15 Staff Comments pg. 16.

IDAHO POWER COMPANY’S REPLY COMMENTS - 14
III. CONCLUSION
20. Idaho Power appreciates the opportunity to respond to comments filed in
this case and for the Commenting Parties’ extensive review of the history behind the
capacity deficiency and resulting need for B2H, the account of the extensive siting and
permitting processes, the myriad agreements associated with B2H project participants.
The Company respectfully requests the Commission (1) accept the Commenting Parties’
recommendation to grant a CPCN to construct the B2H project to meet the identified
capacity deficiency in 2026, (2) reject Staff’s proposed establishment of an unnecessary
soft cap, (3) reject ICL and Boise City’s proposal to track the clean energy delivered via
B2H, and (4) reject Staff’s proposed inclusion of federal funding evaluations as part of the
Company’s request for prudence of B2H project costs.
DATED at Boise, Idaho, this 6th day of June, 2023.

________________________________
DONOVAN E. WALKER
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S REPLY COMMENTS - 15
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 6th day of June 2023, I served a true and correct
copy of Idaho Power Company’s Reply Comments upon the following named parties by
the method indicated below, and addressed to the following:

Commission Staff
Riley Newton
Michael Duval
Deputy Attorney General
Idaho Public Utilities Commission
Po Box 83720
Boise, Idaho 83720-0074

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Idaho Irrigation Pumpers Association, Inc.
Eric L. Olsen
ECHO HAWK & Olsen, PLLC
505 Pershing Ave., Ste. 100
P.O. Box 6119
Pocatello, Idaho 83205

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Lance Kaufman, Ph.D.
2623 NW Bluebell Place
Corvallis, OR 97330
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Industrial Customers of Idaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street
P.O. Box 7218
Boise, Idaho 83702

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Dr. Don Reading
6070 Hill Road
Boise, Idaho 83703
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IDAHO POWER COMPANY’S REPLY COMMENTS - 16
City of Boise
Ed Jewell
Darell Early
150 N. Capitol Blvd.
P.O. Box 500
Boise, Idaho 83701-0500

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Wil Gehl
Boise City Dept. of Public Works
150 N. Capitol Blvd.
P.O. Box 500
Boise, Idaho 83701-0500
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Micron Technology, Inc.
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart LLP
555 17th Street, Suite 3200
Denver, CO 80202

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Jim Swier
Micron Technology, Inc.
8000 South Federal Way
Boise, ID 83707
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Idaho Conservation League
Marie Kellner
Idaho Conservation League
710 N. 6th Street
Boise, Idaho 83702
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IDAHO POWER COMPANY’S REPLY COMMENTS - 17
Brad Heusinkveld
Idaho Conservation League
710 N. 6th Street
Boise, Idaho 83702
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________________________________
Stacy Gust, Regulatory Administrative
Assistant